Preamble

The House met at Eleven o'clock

PRAYERS

[MR. SPEAKER in the Chair]

COMPLAINT OF PRIVILEGE

Mr. Speaker: Yesterday the hon. Member for Mid-Ulster (Miss Devlin) made a complaint of breach of privilege arising from certain correspondence affecting the Ministry of Defence and referring particularly to statements in the House by the right hon. Member for Hertford (Lord Balniel). It is not for me to pronounce on the merits of the complaint raised by the hon. Lady. My duty is only to rule whether in my view the hon. Lady's complaint should be given precedence as a privilege issue over today's business. In my opinion, having taken account of the statements and the letters on which she founds her complaint, I do not think the matter can be given that priority now.

Orders of the Day — GAS BILL

As amended (in the Standing Committee), further considered.

Clause 2

PRINCIPAL DUTIES AND POWERS OF CORPORATION

11.5 a.m.

Mr. T. H. H. Skeet (Bedford): I beg to move Amendment No. 34, in page 3, line 7, leave out 'advantageous or convenient'.

Mr. Speaker: I think it would be for the convenience of the House if, with Amendment No. 34 we took the following Amendments:

Amendment No. 4, in page 3, line 9, at end insert:
'and, in particular, but without prejudice to the generality of the proceeding provision—'

Amendment No. 5, in page 3, leave out lines 10 to 12.

Amendment No. 7, in page 3, line 40, leave out 'subsections (2) and (3)' and insert 'subsection (2)'.

Mr. Skeet: I am grateful to my hon. Friend the Minister for having given this matter close attention but I feel that he has not discharged the undertaking given by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) when he was Minister. In Committee he said:
It is not intended that the Corporation should be able to carry on the manufacture, treatment, sale and so on of products made or derived from gas as an operation entirely divorced and separate from its primary business of gas supply. I will consider, between now and Report, whether an Amendment could be devised to clarify that intention.
The Minister had said earlier:
The Government's intention is that the Gas Corporation should not become an oil company and should not become a petro-chemical company.
I stress "should not become a petrochemical company".
I think that I may be forgiven bias against the Corporation if I say that if it were the Government's intention to set up a petro-chemical company, it would be better to do it by means of a separate nationalised


industry board. The two would be separately accountable, and would have their own duties."—[OFFICIAL REPORT, Standing Committee B, 2nd March, 1972, cc. 310, 308.]
In putting forward his Amendments my hon. Friend the Minister has fallen between two stools. He has not been able to conciliate me and he has given enormous powers under Clause 2 by keeping "advantageous or convenient" after "requisite". Also, by the generality of the language used in paragraph (f), it is possible for the United Kingdom to go into petroleum chemicals in a big way based on natural gas.
My hon. Friend's argument—and I shall be listening to it with some interest—the basis of which I dare say he may be able to sustain, will probably be that there are earlier precedents which he wishes to follow, but there is no magic in the words used. The phrase "requisite, advantageous or convenient" is simply one way of putting it.
In the proceedings on the Gas Bill in 1948 a Clause was moved to give the area boards
power to do anything and to enter into any transaction … which in their opinion is calculated to facilitate the exercise or performance of their functions.
On that occasion Sir Hugh Lucas-Tooth, the then hon. Member for Hendon, South, said:
We might find that a board started on some line of business incidental to their main functions under the Bill, and that that line of business, in fact, was successful and prosperous. It might become a very large part of their undertaking, and a wholly new series of things incidental to that would come within their powers by virtue of the use of these words."—[OFFICIAL REPORT, Standing Committee D, 2nd March, 1948; c. 91.]
Precisely the same line of reasoning was followed again on Section 2(4) of the Iron and Steel Act, 1949.
I stress that there is no magic in the use of these words. In the Electricity Act, 1957, Section 2(7), the generating board was given powers:
to carry on all such other activities as it may appear to the Generating Board to be requisite, advantageous or convenient for them to carry on for or in connection with the performance of their functions under the preceding provisions of this section or with a view to making the best use of any assets vested in them.
That was accompanied by a proviso:
Provided that nothing in paragraph (c) of this subsection or in the principal Act, shall

be construed as authorising the Generating Board to manufacture anything except as mentioned in paragraph (a).
In other words, what was done in that Act was to make a proviso to prevent the Government going too far. But the Bill which is now before us contains no such proviso. Although in Committee I attempted to get modification of paragraph (f), the Minister apparently was not prepared to concede that point.
I shall go back a little in the course of history to find out what exactly has been laid down in past legislation. I go back to the Coal Industry Nationalisation Act, 1946, Section 1(2) of which reads:
The functions of the National Coal Board…shall include the carrying on of all such activities as it may appear to the Board to be requisite, advantageous or convenient for them to carry on for or in connection with the discharge of their duties under the preceding subsection, and in particular, but without prejudice to the generality of this section …
It then lists a number of powers in paragraphs (a) to (f). This is precisely the provision which the Minister is recommending in this Bill. He is utilising a Socialist expedient to deal with an undertaking given in Committee. In 1972 he has gone back and culled a suggestion from 1946 to deal with a temporary situation.

Mr. Arthur Palmer: Is the hon. Gentleman aware that when the Electricity Act, 1947, was in Standing Committee—and I was a member of that Committee—the Minister who was then in charge of the Bill resolutely defended the words about which the hon. Gentleman now complains? It was only with the greatest reluctance that in the end the then Conservative Government agreed to the Amendment.

Mr. Skeet: It was a question of debate and judgment as to what word should be used. It is for this House to lay these matters down; it is for the judiciary to interpret them. I am concerned with the way in which the judiciary will interpret this point.
It can be seen from previous Electricity Acts that they have never gone radically outside their own province, nor has the coal industry legislation. But on this occasion the Minister will enable them to go forth into an entirely new area since powers will exist which another Government many years ahead could use.
I suggest that the Minister should listen carefully to these arguments and look at the provision again. I hope he will see the dangers which are likely to arise. He has not provided a solution here and this could put us in difficulty. In not curing the original defect my hon. Friend has left the situation wide open for the establishment of the British Gas Corporation as a gas-based chemical industry.
In my view, the test should be not what is requisite, advantageous or convenient, but simply what is necessary to allow the corporation to develop and maintain an efficient guaranteed and economic system of gas supply for Great Britain. This has been clearly set out in Clause 2(1). My hon. Friend thought, probably quite genuinely, that telescoping the two provisions and putting in the additional words of paragraphs (a) to (h) these would be examples of what could be done. However, I feel that he has not achieved this objective and that his argument has been invalidated.
11.15 a.m.
What my hon. Friend has done is to set up two sets of parallel powers. The first is to carry out such activities as appear to be requisite, advantageous or convenient in connection with the principal duty outlined in subsection (1). The second matter, which is completely separate, is to confer the powers listed in paragraphs (a) to (h). Paragraph (f) contains this full and resplendent provision:
to manufacture, treat, render saleable, supply or sell any by-products obtained in the process of manufacturing gas, and any products made or derived from gas or from any by-product so obtained.
That provision is extremely wide. I shall not be content with being told that there is an easy way of overcoming this difficulty by a simple undertaking. I would rather see the situation put right in the Bill.
What exactly could the British Gas Corporation produce in the way of petroleum chemicals by utilising the phraseology as it now stands? It could produce hydrogen, carbon dioxide, ammonia, nitric acid, ammonium nitrate, urea, methanol and all products derived from it. Then there are the products ethylene, propylene and butylene, possibly derived from ethane which could be im-

ported from Sonatrach in Algeria. The British Gas Corporation produces a number of "building blocks" in the organic field of petro-chemicals. Then there are aromatics such as benzene, toluene and xylene. This is a long list but there are many more. It is a new industry and, in the end, we shall find that a large part of the petro-chemical industry might well be run by the gas industry.

Mr. Eric G. Varley: Hear, hear.

Mr. Skeet: The hon. Gentleman says "Hear, hear" and I appreciate that he would like to see such a situation. The previous Minister indicated, however, that if we wanted to see a national petro-chemical industry, it should be handled as a separate matter so that we should at least know where we were. But this has not happened. Power is being provided in this legislation, and of course Labour Members are delighted to see the Conservatives giving Governments these powers. If a Labour Government are ever returned to power in the next 20 years, that Government will not hesitate to use these powers.
I have tabled this very simple Amendment seeking to leave out the words "advantageous or convenient". "Advantageous" means "profitable or beneficial" and this appears to be amply covered in Clause 2(1). That provision speaks of
an efficient, co-ordinated and economical system of gas supply".
Everybody knows the meaning of the word "convenient". It means what is personally suitable. It is so broad a word that the British Gas Corporation could probably build a mosque. Certainly "convenient" is one of the widest words in the language. On the other hand, if the Minister follows the suggestion I have advanced, I should like to know how that would restrict the operation of his own powers. He could do precisely what he wanted without going into petro-chemicals.
Another argument with which I may be faced is that my hon. Friend will say that it is all a question of interpretation and of finding out precisely what is meant. This matter has never been before the courts and has never been interpreted. If it were to go before the courts,


my judgment is that it would be interpreted against my hon. Friend. The argument may be that he could refuse the necessary investment funds under Clause 5 or could direct their discontinuance under Clause 7. My hon. Friend is very genuine and probably would take this course, but if the hon. Member for Chesterfield (Mr. Varley) were to become Minister what would he do in these circumstances? He would give full authority and go straight ahead and we would have no safeguard at all. He would refer back to the days of June, 1972, when these powers were conferred.
I want to be very constructive. It is necessary only to say that the way my hon. Friend could put matters right, if he agreed to consider the position again, would be to insert a new subsection (2) reading:
Subject to subsection (3) below, the Corporation shall have power to carry on all such activities as it may appear to them to be requisite for them to carry on for or in connection with the discharge of their duty under subsection (1) above, including in particular but without prejudice to the generality of the proceeding provision, power
and then follow with paragraphs (a) to (h)
It will be noted that I have used the word "including". That makes the two run together under the general power which has been conceded. To use the word "and" is to give an entirely separate set of powers so that not merely would the British Gas Corporation be able to operate on the gas front and supply gas, which we all support; it would also be able under the separate powers in paragraph (f) to go into organic chemicals.
I beseech my hon. Friend to look again at this provision. Before the Bill goes to another place, I hope he will think seriously about the interpretation of the legal powers and that he will consider, if necessary, inserting a safeguard to prevent the British Gas Corporation going into a field of activity to which it does not belong.

Mr. Gerald Kaufman: I apologise to the hon. Member for Bedford (Mr. Skeet) for not being here at the beginning of his remarks, especially in view of the fact that, al-

though I have some sympathy with the terms of his Amendment, I have no sympathy with the sentiments behind it, as he will readily appreciate.
The reason why I am glad that the hon. Gentleman has moved the Amendment and why, if I succeed in catching your eye, Mr. Speaker, I shall be speaking on other Amendments of a similar kind is that I regret greatly, as I had cause to say last week, the manner in which the Government are drafting their legislation, of which the Amendment is a very good example. It simply will not do.
I differ totally from the hon. Member for Bedford in that I believe that the Gas Corporation should have extremely wide powers not just to operate in gas but to engage in many other activities in order to provide employment and to use the technology at its disposal in very many other ways. But if that is to be made possible for the Gas Corporation, it should be done by specifically worded legislation which says what it can do and what it cannot do rather than this slack and lazy wording of a kind that we have had continually through this and many other Bills which have come before the House in this Session.

Mr. W. E. Garrett: Especially the Industrial Relations Bill.

Mr. Kaufman: As my hon. Friend the Member for Wallsend (Mr. Garrett) says, especially the Industrial Relations Bill, though at least in the present case there is no guillotine in operation and we shall have an opportunity to attempt to remedy some of this Bill's defects during the sittings ahead of us as we discuss later Amendments.
One of the troubles which have arisen in the case of the Industrial Relations Act could be repeated in this Bill were it to come before a court. The interpretation of "advantageous or convenient" has manifold possibilities. I have not done the obvious and tedious exercise of going to the Library and consulting the Oxford Dictionary or Roget's Thesaurus, but I am sure that if I did I should be able to interpret the words in very many ways.
Despite the misfortunes of Sir John Donaldson, I still have some faith in our courts of law. However, this is not simply for the courts of law to interpret—

Mr. Skeet: Perhaps I might help the hon. Gentleman. I have consulted the Oxford Dictionary. Perhaps I might give the hon. Gentleman its interpretation of "advantageous":
to add to the amount or value of, profitable, be beneficial to, to promote …
and "convenient":
suitable, favourable, in the current sense, personally suitable, favourable to one's comfort, commodious …
In other words, anything can be done under these powers.

Mr. Kaufman: The hon. Gentleman is perfectly right, and if, as I am sure would never happen, the Gas Corporation got into the hands of unscrupulous people, interpretations of the kind that the hon. Gentleman has read to us—

Mr. Skeet: The Labour Party?

Mr. Kaufman: The hon. Gentleman is getting some support from me. He must not insult my right hon. and hon. Friends if he wishes to carry us with him any of the way.
If the corporation were by some misfortune to fall into the hands of unscrupulous people, there would be nothing in the subsection as it is worded at present, taking into account the interpretations that the hon Gentleman has just read, to stop them using the resources of the corporation to line their own pockets. The hon. Gentleman has made this point very well. I could not have put it more succinctly.
It is not simply that our courts of law would have difficulty in interpreting this provision. It is the fact that Ministers of the Crown are also responsible for the interpretation of Acts of Parliament. It will be the Minister's responsibility to ensure that the Gas Corporation behaves in the way that Parliament has willed that it should behave. The hon. Gentleman has said that there is a danger of the Gas Corporation falling into the hands of unscrupulous people since my right hon. and hon. Friends some day may form the Government. However we have already a Government composed of unscrupulous people who could if they wished interpret these phrases and others in a way which was advantageous to them but possibly not advantageous to the public good or to the Gas Corporation.
Therefore, while in no sense supporting the sentiments of the hon. Member for Bedford, I wish that more of his hon. Friends were as honest in their approach to these matters as he is. I do not support what he says, but I welcome his initiative in moving this Amendment since it provides us with an opportunity to get some satisfaction from the Government which will enable us to facilitate the passage of this and other Bills which are still coming before the House. We hope that we shall be given an assurance that in future the Government will get the parliamentary draftsmen, who are deservedly well remunerated for their work, to draft Bills not slackly like this one but with the sharpness, elegance and political acumen with which the Housing Fnance Bill was drafted, so disastrously to us all.
Therefore, I support the hon. Member for Bedford. Though I shall not be able to go into the Division Lobby with him if presses his Amendment to a Division, I shall be with him in spirit.

11.30 a.m.

The Under-Secretary of State for Trade and Industry (Mr. Peter Emery): With the Amendment moved by my hon. Friend the Member for Bedford (Mr. Skeet) we are discussing Government Amendments Nos. 4, 5 and 7. It may facilitate the understanding of the Government's position if I deal specifically at the outset with those Government Amendments.
They give effect to an undertaking given in Committee by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), who was then in charge of the Bill, in response to an Amendment moved by my hon. Friend the Member for Bedford. On 10th March my hon. Friend the Member for Cirencester and Tewkesbury gave the assurance which my hon. Friend the Member for Bedford referred to this morning, when he said that it was intended that the Corporation should be able to carry on the manufacturing, the treatment, the sale and so on of products made or derived from gas as an operation entirely divorced and separate from its primary business of gas supply. We undertook to find words to clarify that intention. For that reason, I shall in due course move Amendments Nos. 4, 5 and 7.
It is not the Government's intention that the Gas Corporation shall be allowed to become a major petro-chemical industry. I have said that clearly in Committee, but I repeat it on the Floor of the House during this Report stage in direct response to my hon. Friend the Member for Bedford. Whilst I understand his fears, I quickly reject his condemnation that I am to use a Socialistic expedient. My hon. Friend has known me long enough to know that that is not my way of doing things. Nor do I think hon. Gentlemen opposite believe that is my way of doing things. Therefore, I reject that condemnation completely and absolutely.
In the same way, my hon. Friend's list from urea to polypropylene, I suppose—

Mr. Skeet: Propylene.

Mr. Emery: I am interjecting polypropylene because I should like to carry this matter further. I do not think my hon. Friend went far enough. It is neither the intent of the Gas Corporation nor the desire of the Government that the corporation should become involved in petrochemical activity.

Mr. Skeet: Will my hon. Friend give way?

Mr. Emery: When I have finished my argument, my hon. Friend may find I have covered the points that he wishes to raise.
The width of the power in the Bill as it stands arises because we have been unable to find an acceptable definition for "gas". Therefore, the power in Clause 2(3) is expressed as entirely separate with no relation to the corporation's primary duties under Clause 2(1).
It could therefore be argued that Clause 2(3)(f)—this is the argument my hon. Friend has put to the Committee—enables the corporation to manufacture and sell products made or derived from gas independently of its normal gas supply activities.
The Amendments correct the possible weakness by running Clause 2(2) and (3) together and making it clear that the powers in paragraphs (a) to (h) are only particular examples of the general power in Clause 2(2).

to carry on all such activities … requisite, advantageous or convenient … in connection with
its primary duty.

Mr. Skeet: Will my hon. Friend give way?

Mr. Emery: I emphasise "its primary duty". They are not independent powers. In that way it is made plain that the power of manufacturing and selling products made or derived from gas covers those activities only to the extent that they can be related to the corporation's primary duty of gas supply. This has been found in my view to be the best way of making the intention clear without imposing limitations on the corporation's powers, which might prove unduly restrictive in future. After I have given way I shall come back to explain what I mean by that.

Mr. Skeet: I am most grateful to the Minister. He is expressing his intention, but that is not what Amendment No. 4 says. At the end of Clause 2(2) my hon. Friend seeks to add:
and, in particular, but without prejudice to the generality of the preceding provision—".
Then he goes on to (a) to (h). By putting in the word "and" he is giving supplementary and independent powers, whatever he may say about his intention. Will he accept "including" instead?

Mr. Emery: That point has been put forward in my hon. Friend's speech. I always try to deal with his points, and I shall deal with that point in particular. I was going to do it later, but I will do it now. My hon. Friend originally suggested that instead of saying "and" the Amendment should say "including the following powers."

Mr. Skeet: Yes.

Mr. Emery: I am advised that "and, in particular" makes it absolutely clear that the powers in (a) to (h) are only particular examples of the general power. They are not two parallel sets of powers. I do not intend to give way now to what my hon Friend said, because I believe, and am advised, that that is how the law will be interpreted. I will look at the word "including" to see whether the strength of the argument put forward by my hon. Friend is acceptable.


If I have any doubt of the sort that he has, then in another place we can consider taking action. I repeat that I believe it will not be necessary. We do not consider that "including" will add any more strength than using the words we intend by our Amendment to put into the Bill.

Mr. Kaufman: As 1 said last Friday, the hon. Gentleman's bona fides are not in doubt, nor his good intentions. He says that he has been advised how certain words will be interpreted in the courts. With respect to his hon. and learned Friend the Solicitor-General, whose advice was sought, certain words in the Industrial Relations Act were interpreted by the court in an entirely converse manner. What assurance has the hon. Gentleman that things will work out better this time?

Mr. Emery: When the hon. Member for Manchester, Ardwick (Mr. Kaufman) can produce the man who is always right, I will deal with his argument, but not until then.
Turning to Amendment No. 34, two parts are important and should be answered. The striking-out of the words "advantageous or convenient" would be extremely restrictive with consequences for the gas industry which would go far beyond Clause 2(3)(f) and would mean that the corporation would be restricted to activities which it thinks requisite; that is, necessary for or in connection with the discharge of its primary duty under Clause 2(1). The test of "necessity" could exclude a considerable number of normal and reasonable activities currently undertaken by the gas industry in connection with its gas supply functions, and might leave it with hardly any activities other than the acquisition, distribution and sale of gas. Mention of other activities in what is now Clause 2(3) would not entitle the corporation to engage in them unless they could be shown to be requisite. That is perhaps a pedantic factor, but it is of considerable importance. This insistence on a link between the activities in Clause 2(3) and the corporation's primary duty is the object and the effect of the Government's Amendments.
The safeguard against unreasonable activities is the corporation placing a reasonable interpretation on its powers.

It is not just the Minister's interpretation; it is the corporation's. I am sure that neither side would think of legislating for a corporation whose management was absolutely crazy. The powers are to ensure that that does not happen. The history of the management of nationalised industries does not lead in that direction; it leads in the opposite direction of soundness and responsibility. To use as part of the argument that we have to legislate against the madness of the management of the nationalised industries is a matter with which I do not need to deal for very long on the Floor of the House.
What I am saying is that the undertaking given by my hon. Friend is being met by the Government Amendments. We are aware of the fears expressed by my hon. Friend, and we have no more intention than he has of allowing what he fears to happen because of sloppy legislation. I hope that with that approach to the Amendments we might be able to make some progress.

Mr. Varley: I do not want to detain the House for more than a few moments, but there are times in the life of a Parliament when the Opposition have to come to the aid of the Government. There has been a bipartisan approach on Northern Ireland, we have come to the aid of the Government on the worst extremes of the Industry Bill, and on this Amendment we shall support the Government and the line taken by the Minister.
Nevertheless, we are grateful to the hon. Member for Bedford (Mr. Skeet) for putting down his Amendment, because it reinforces us in our view. We know that he represents a substantial body of opinion on the Government side of the House which would like to restrict the activities of public corporations to a greater extent than even Ministers are prepared to do. To that extent the hon. Gentleman's argument has helped to reinforce our view that restrictions on public corporations ought not to be imposed in the way that he suggests.
Some hon. Gentlemen opposite have said that the new Gas Corporation should be confined to activities which provide the gas for Mrs. Jones to cook her Sunday joint and that it ought not to move into other activities. It is their


view that the expertise and skilled management of the gas industry ought to be confined to that domestic activity, but everybody knows that the gas industry is capable of much more than that. There are able people in the industry who can move into the activities which flow as a natural consequence from their main activities, and do so profitably in order to help, sustain and benefit the revenue of the industry. We are therefore opposed to the Amendment, and we think that the Minister's view is correct.
The Government have said that it is not their intention to allow the Gas Corporation to become an oil company or to go into the petro-chemical industry. I reserve judgment on that. There may well be activities in the North Sea in which the Gas Corporation will be involved which could result in it being profitable and advantageous to the nation or the gas industry for the corporation to move into the oil industry or into the petro-chemical industry. That view has been stated more than once from this side of the House, but it is necessary to repeat it.
The hon. Gentleman wants to restrict the Gas Corporation to supplying gas. What does he suggest the corporation should do with the products which arise at Solihull and elsewhere as a natural consequence of processing gas? What is the corporation supposed to do if it produces benzene or naphthalene as a consequence of processing gas? Is it supposed to give those products away? Would it not be sensible to try to find a commercial market for them? The hon. Gentleman did not address himself to that issue, and I am anxious to hear his views on the matter. It seems logical that if there are any spin-off activities the gas industry should have full freedom to exploit them and sell them for the benefit of the industry and of the nation.

11.45 a.m.

Mr. Kaufman: Surely it is more than that? In a modern industrial state, what objection is there to the Gas Corporation going into the petro-chemical industry and becoming a rival of ICI and thus helping to break the power of that organisation? What possible objection can there be to that?

Mr. Varley: I take my hon. Friend's point. There are structural and management problems in his suggestion, but there is also merit in it. We do not know how the technology of the gas industry will develop. Anybody who looked at the gas industry in the late 'fifties would have thought that it was on its last legs, but since then there has been a tremendous transformation, and no one knows what will happen over the next few years, because technology is moving at a great pace, indeed. There is something in what my hon. Friend says, but there are limitations because of the existing structural problems.
I hope that the hon. Member for Bedford will not press the Amendment to a Division, but if he does we shall support the Government. I trust that the Government Amendments, which arise out of an undertaking given in Committee by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), are not designed to cramp the gas industry still further. Perhaps the Minister will assure me that the Amendments are not designed necessarily to cramp the activities of the corporation, because I should not like to see that happen.
I saw no objection to the original wording of Clause 2, and I hope that there have been consultations about this with the gas industry. I repeat my hope that the hon. Member for Bedford will not press his Amendment, but I say again that if he does the Minister can rest assured that he has our protection.

Mr. Emery: Before the hon. Gentleman sits down, may I reply to his question. I have made it clear that the Government Amendments are not necessarily cramping, but let me make it absolutely clear, too, that they do not give the Gas Corporation power to do the kind of things which the hon. Gentleman was suggesting he might want it to do at some other time.

Mr. Varley: I understand that, and we went into this in great detail on an earlier occasion. So long as it is no more than a tidying up, and is not a further cramping of the gas industry, we are content. The activities to which I referred earlier are matters to which we shall have to return, and a future Labour Government will return to them. We warn that we


shall do that. We see nothing wrong in it. It is logical, and our case will stand up to examination.

Mr. John Golding: I should have had more sympathy with the Government Amendments had it not been for the Rolls-Royce (Purchase) Act, 1971, with which I shall deal in a few moments.
I think that my hon. Friend the Member for Chesterfield (Mr. Varley) has been too moderate in his approach to the Government Amendments, and I shall resist them strongly, bearing in mind the provisions of the Coal Industry Act, 1971.
I draw attention to the Rolls-Royce (Purchase) Act, 1971, because it does not contain any of the restrictions which are now being imposed upon the nationalised gas industry. It appears to me to be a very odd proceeding that in one and the same Session the Government can nationalise an industry and not impose on it any conditions whatsoever and, having been subjected to the hiving-off arguments advanced by their supporters, now give way in a set of Amendments which will hinder a nationalised industry.
The Long Title of the Rolls-Royce (Purchase) Act, 1971, is:
An Act to make provision for and in connection with the acquisition for the benefit of the Crown of any part of the undertaking and assets of Rolls-Royce Ltd. or its subsidiaries, and the carrying on of any undertaking so acquired and for purposes connected therewith.
That is the kind of general statement preferred when the Tory Government are nationalising a private undertaking that I should like to see applied to all nationalised industries.

Mr. Kaufman: Does not my hon. Friend agree that it is a great misfortune for the House that the hon. Member for Derbyshire, South-East (Mr. Rost) has been elevated to the PPS bench, as a result of which we do not have the benefit of his opinion as to which of those methods is preferable?

Mr. Golding: It is an unmixed blessing for the House that the hon. Gentleman should have gone to the PPS bench.
The Government's attitude is inconsistent. In the Rolls-Royce situation they took the right point of view by deciding

to take that undertaking into public ownership and giving it a wide remit.
I tend to favour the coal industry rather than the gas industry, but had not certain provisions been put into the Coal Industry Act, 1971, I might not have taken the same exception to the restrictions now being placed on the Gas Corporation. One finds in Sections 6 and 7 of the Coal Industry Act very specific attacks on the powers of the National Coal Board. Section 6 deals with:
Powers of Secretary of State to call for report of Board's diversified activities.
Section 7 provides for
Further power of Secretary of State to give directions to the Board.
During our debates on that Measure it became apparent that the intention of the Government was to ensure that the coal industry would derive no advantage at all from the exploration activities in the North Sea. It seemed to be the clear intention of the Government that the National Coal Board should be restricted to the extraction of coal, and that neither the board nor, in particular, the workers in the industry should get any advantage from the developments that were taking place in the extraction of natural gas or oil from the North Sea. I thought when I read this Bill that the Government, if not having second thoughts about the National Coal Board's position, were at least prepared to let the Gas Corporation develop as freely as possible.
I can see no reason whatsoever for the gas industry not being a major petro-chemical industry. In the debate on the Coal Industry Bill I drew attention to the developments which had taken place within private industry. It has been a characteristic of industrial development that if a private concern sees that a new technology, a new process, is likely to undermine its competitive position it has been fully free to develop its own activities along those lines.
I gave examples at the time. When the people who made horse-drawn carriages saw the threat of the motor car, they diversified into motor car manufacture. It was reasonable for them to do so from the point of view of both their profitability and the continuity of employment of their workers. If one studies the history of the National Union of


Vehicle Builders, now an important union in motor manufacture, one finds a history of adaptation in the face of changing technologies and the changing use of materials.
More contemporary examples can be given. My hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) will be aware, as a Lancashire Member, of the problems which the cotton industry has faced since the war—

Mr. Speaker: Order. We cannot have a general debate on all these industries. I shall be grateful if the hon. Member will stick to the Amendment.

Mr. Golding: Then I will just say, Mr. Speaker, that the point at issue is whether it is reasonable for a nationalised industry which sees its one commodity under the threat of very quick replacement by another commodity to be free to enter into the manufacture of that alternative commodity. I say that it is utterly reasonable. If I weary you by giving historical analogies, I apologise, Mr. Speaker, but the point that you must take is that it is clearly proper for us to call attention to the attacks which the hon. Member for Bedford (Mr. Skeet) is making—

Mr. Kaufman: May I, with all respect, advise my hon. Friend not to abandon his analogies which you, Mr. Speaker, have ruled out of order on this Amendment, as I think that they will be within the rules of order on the next Amendment.

12 noon.

Mr. Golding: I bow to your ruling, of course, Mr. Speaker: I have never yet accepted the discipline often sought to be imposed upon me by my hon. Friend the Member for Ardwick.
But I emphasise this point because it is a serious point when taken in connection with the Coal Industry Act, 1971. It is serious in connection with other nationalised industries. Hon. Members on the Government benches are trying to produce a situation in which they clearly know that within a matter of years the nationalised industries will be obsolete industries faced with the problems of obsolescence, unprofitable situations and situation in which they cannot guarantee continuity of employment for their

employees. The Opposition are concerned with the welfare of the nationalised industries. I strongly oppose the Amendment because I know that the hon. Member for Bedford, together with his absent hon. Friends, is not concerned with the welfare of the nationalised industries. He and his hon. Friends are concerned with cramping and confining the activities of the nationalised industries so that they will be unsuccessful.
I move to another point, the use of equipment. We face this situation already in the use of computers in the coal industry. It may well be in the future that the gas industry could need computers of a larger capacity than that which it needs for itself. It may be profitable for the gas industry to hire out computer time. It has been to the advantage of the National Coal Board to have an efficient computer system under its control rather than to hire it from other sources. But the National Coal Board has found that it has spare capacity, particularly at night. It would be advantageous and convenient to the Gas Corporation to be able to hire out that computer time to other nationalised industries or even private industry. Is the hon. Member for Bedford saying that the Gas Corporation ought not to be able to do that and so take advantage of computer technology? I am not sure whether or not he is saying that, but if the Amendment were carried that would be the effect of the Bill.

Mr. Kaufman: The National Coal Board's computer time has been hired out for even theatrical bookings, which not even my hon. Friends from coal mining constituencies could say had anything to do with digging coal. Nevertheless, it was a very economic use of computers. Why should not the Gas Corporation be able to do this kind of thing as well?

Mr. Golding: I certainly accept my hon. Friend's point. But the argument can be carried further. It could well be that in the laying of gas pipes and mains it would be advantageous and convenient for the Gas Corporation to contract with the Post Office or the electricity authorities, or with private oil concerns, so that when the Gas Corporation dug its trenches and laid its pipes it would be convenient for it to do some work for those other bodies at the same time.


It would be utterly unreasonable to say to the Gas Corporation, "You have plans to lay piping between one town and another, between the source of supply and the point of usage, but you cannot offer the facilities of laying cable or pipes to any other authority because your job is one simple job, that of supplying gas."
That would be utterly unreasonable. If the hon. Member for Bedford had heard the Opposition proposing that such conditions should be laid upon private industry, he would be the first to say that that was outrageous and unreasonable. An organisation must be allowed to make whatever profit it can. It must be allowed to work as efficiently as possible. The Minister was right when he said that one must trust the leaders of the nationalised industries to use their initiative. After all, they will be primarily concerned with the manufacture and distribution of gas. They will not want to diversify for the sake of diversification. But surely, if they see commercial possibilities, they should be allowed to exploit them. After all, it is from the Government side of the House that demands have come for profitability. If the nationalised industries make a loss, the shrieks come from the Government benches. The managements of the nationalised industries are attacked for their incompetence and lack of commercial judgment. But surely, if this is the situation, clearly those managements should be allowed to exploit commercial possibilities when they see them.
I wonder why hon. Members on the Government benches want to restrict the nationalised industries in this way. Is it because they are frightened of the competition? Is it because they have studied the work of Mr. Pryke and seen the relative efficiency of the nationalised industries in recent years as against private industry? Is it that they see that when the nationalised industries undertake work, there is not only a loss of profit for private industry but also a loss of work? When the nationalised industries see that it is advantageous or convenient—the words that the hon. Member for Bedford wants deleted—for them to carry out the work, they do it more effectively and efficiently than private industry.

Mr. Skeet: Rubbish.

Mr. Golding: The hon. Gentleman says "Rubbish", but in saying that he shows

his concern, his fear. This is an Amendment of fear. It is the fear of Aims of Industry, of men who see that year by year the nationalised industries have become more effective, more efficient and highly competitive.

Mr. Speaker: Order. Even under provocation, this must not become a general debate on the nationalised industries.

Mr. Golding: Mr. Speaker, I was responding—
—

Mr. Speaker: Order. I was encouraging the hon. Member not to respond to provocation.

Mr. Golding: Prevention is better than cure, Mr. Speaker.

Mr. Speaker: No doubt, the drafters of Standing Order No. 22 were thinking of that.

Mr. Golding: Perhaps instead of saying "nationalised industries", Mr. Speaker, to remain in order I had better say "the gas industry" on all occasions. In view of Standing Order No. 22, Mr. Speaker, where inadvertently I say "nationalised industries" perhaps you would quickly remind me that I ought to say "the gas industry".
Private industry is frightened of competition from the gas industry. I was hoping not to be provoked and to make a short intervention on this topic—[Interruption.] The loud mutterings of hon. Members opposite make it difficult for me.
It is absurd to confine by Statute the talents of people working in an industry. What effect will the Amendments have—this is where I part company to some extent from my hon. Friend the Member for Chesterfield, because he was not hard enough on the Minister—on work in research laboratories within the corporation? Does the hon. Gentleman say that it would be illegal for a research scientist employed by the corporation to start to look deeply into the petro-chemical qualities of gas? Would that be outside the corporation's terms of reference?

Mr. Speaker: Order. I must ask the hon. Gentleman to bring his remarks to a conclusion fairly soon. He is certainly being tedious.

Mr. Golding: Mr. Speaker, these are genuine questions which the Undersecretary could answer. Limitations are being placed on the nationalised industries.

Mr. Garrett: Have not the fears that my hon. Friend has been voicing already been felt in the research headquarters of the Gas Council There is dismay and consternation. The prospects of people who would like to have a future in the industry are being jeopardised.

Mr. Golding: Mr. Speaker, you have heard my hon. Friend's intervention. Perhaps my hon. Friend's question, too, was tedious.

Mr. Garrett: It was not my intention to make it tedious. I thought that it was a positive contribution to my hon. Friend's contribution.

Mr. Golding: We debated this subject when we had a debate on the National Coal Board. The Gas Corporation is no less important than the National Coal Board. These limitations are important. The fact that the debate is taking place on a Friday in the presence of very few hon. Members does not make the issue any less serious. This will have a serious impact on the working lives of many people. It is pertinent to ask these questions. We are debating whether the corporation—

Mr. Speaker: Order. The hon. Gentleman is repeating himself again and again. We have had this argument about four times.

Mr. Golding: Mr. Speaker, you say that we have had it four times, but I emphasise its importance. Because of your ruling I did not develop four times my point about the impact on research. I was seeking to emphasise the extreme importance of the corporation's being able to make research inquiries right across the board so that it could inform itself fully of the industry's future prospects.

12.15 p.m.

Mr. Skeet: I shall not accept the bait which has been laid across my path. I shall answer one question asked by the hon. Member for Chesterfield (Mr. Varley). My points were fairly clear. The new corporation should dispose of pri-

mary products—natural gas, natural gas liquid and naphtha—and not enter into the manufacture and sale of chemicals. This is obvious.
I am grateful to my hon. Friend the Minister for the undertaking he gave. If it is desired that he should take independent legal advice, quite apart from that in his Department, so that his intention can be carried out legally and is liable to be correctly interpreted by the courts, I should certainly have no objection, because we on this side share the same desire not unduly to expand the nationalised industries. On the other hand, if my hon. Friend does not give the matter the most careful consideration it may become necessary in future years for the corporation to change its name. I could think of none better than "Emery High Speed Chemicals", but I hope that this will never come about.
I welcome the approach my hon. Friend the Minister has made. I welcome to a certain extent the bipartisan approach on this occasion. For the country's sake I wish that we could have a bipartisan aproach a little more often. On sterling and other of the country's major problems it would be invaluable.
With those words, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 4, in page 3, line 9, at end insert:
'and, in particular, but without prejudice to the generality of the preceding provision—'.

No. 5, in page 3, leave out lines 10 to 12.—[Mr. Emery.]

Mr. Varley: I beg to move Amendment No. 6, in page 3, line 32, leave out
'required by the Corporation, and to'
and insert 'and to sell'.

Mr. Speaker: It will be for the convenience of the House if with this Amendment we take Amendment No. 8, in page 4, leave out lines 5 to
7.

Mr. Varley: These Amendments seek to give the corporation power, in addition to manufacturing plant for its own use, to manufacture it for the open market and for export. Debate took place on this subject when the Clause was under discussion in Committee but the whole situation was left in a very unsatisfactory state.
Subsection (3)(g) is far too restrictive in an age when the gas industry is one of the fastest-growing sectors in the British economy. In support of that view I call in aid an article in the Financial Times of 2nd June under the heading
Gas industry is fastest grower in the United Kingdom".
It went on to say:
The U.K. gas industry, which declined during the 1950s, grew faster between 1966 and 1971 than any other industrial sector, according to figures released by the Central Statistical Office. The industry expanded at an annual rate of 12 per cent. in the five years, against an average 3 per cent. in the preceding comparative period.
That shows the remarkable growth of the British gas industry, and as a consequence the growth in its use of plant and equipment has been equally remarkable. We on this side of the House regard the words "relating to manufacture" as excessively restrictive and we believe it ought to be possible for the British Gas Corporation not only to manufacture plant for its own use but, if necessary, manufacture it for the open market.
It is not difficult to envisage a situation where the British Gas Corporation could manufacture plant which might have immense practical use in other industries. The plant could have an application to other fuel industries, including the oil industry. In fact the oil industry perhaps comes first to mind. If this were the case, as I am sure it is, why should not the corporation have the power to sell it and get the benefits from so doing? Certainly there seems to be no logical reason why this restriction should be placed upon the industry.
The other day I happened to read a paper given by Mr. C. E. Mills, the Member for Economic Planning of the Gas Council, given to the Institution of Gas Engineers about the International Consultancy Service. I do not know very much about the Gas Council's International Consultancy Service but, from what Mr. Mills said, the Gas Council is licensing its own technology in many areas of the world.
I should like to quote from Mr. Mills' paper:
Although process licensing represents the greatest workload and gives a far greater financial return, smaller scale inventions are

also exploited, ranging from large ovens and furnaces down to … plug-in connecters and spark igniters.
I am not suggesting that goes all the way in support of my case, but it seems that the International Consultancy Service is already selling the gas industry's technology and it ought to be possible for the gas industry to involve itself in increased manufacturing so that it may sell some of its apliances as well.
We are constantly told by the Government that they want to encourage competition and enterprise. If this is the case, why should not the publicly-owned gas industry benefit from enterprise and initiative, not only in its consultancy service but also in its manufacture of plant, fittings and equipment generally? Those in charge of the gas industry have shown great initiative in the last decade, and I pay tribute to them for their hard work and dedication in bringing about an efficient industry. I pay tribute also to the workers in the industry who have played their part.
However, the Minister, when he replies to the debate, may say that the reason for these words and for the restriction is a result of words which appeared in the Gas Act, 1948. As I have said on many occasions when we have debated this Bill in the House and in Committee, it may be that in many respects this is a consolidation Measure of all the gas legislation that has gone through this House since the war and even before. But in the modern gas industry, a gas industry which is totally different from the industry which existed in 1948, I do not see why this legislative anachronism should be put in this legislation.
There are other aspects of this matter which are potentially more serious than those I have raised. It is proper that we should take Amendments Nos. 6 and 8 together because in the case that I am making they are inextricably linked. On 2nd March we debated in Committee the entirely unnecessary restriction placed on the new corporation, in lines 4 to 7 on page 4 of the Bill. We had some debate about this matter. We asked what would be the situation if this country were to enter the Common Market.
I put this question to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), then the Under-Secretary of State


for Trade and Industry, who was in charge of the Bill at that time. I said:
There is one other intriguing aspect on the matter of the export of gas fittings, and that is how this provision will stand up when we enter the EEC. The Common Market has been sold on the basis that it is virtually an extension of a big home market. If we leave this provision in the Bill, would it prevent the gas industry from manufacturing gas and fittings and selling them to our new European partners? Would that restrict in any way the countries of the Six and the other applicant countries? Would the Gas Council regard that as a home market? Could they export it in that sense?"—[OFFICIAL REPORT, Standing Committee B, 2nd March, 1972, c. 326.]
The hon. Member for Cirencester and Tewkesbury said that he would look into this point and get in touch with me. In the event, it was the hon. Member for Honiton (Mr. Emery), the present Under-secretary of State who is now in charge of the Bill, who wrote to me on 21st April on this matter. I should like to read the letter:
During the debate on Amendment 40 on 2nd March, 1972 in Standing Committee on the Gas Bill you asked … about the supply of gas fittings by the British Gas Corporation to Member countries of the EEC after United Kingdom entry to the Community. Nicholas Ridley undertook to look at the use of the term 'export' in the context of Clause 2(4)(b). A similar point arises on Clause 2(4)(a)(ii)
I have now had a look at this and find that the Treaty of Rome uses the phrase 'exports' to describe trade between Member countries of the EEC, and the phraseology of the Bill will therefore be quite appropriate in that context. In the light of this, I do not think that any amendment to the Bill is necessary.
I think that to a great extent only confirms, or compounds, my worst fears. It is absolutely intolerable that even as a member of the Common Market—assuming that we enter the Common Market—the corporation will not be able to export gas fittings without asking the Secretary of State for permission to do so. As I said, we were told that the Common Market was sold on the basis of a big open market, and it now appears that as a result of this legislation the gas industry could be restricted in this way.
I know that in resisting the Amendment the Under-Secretary may well rely on Clause 2(4)(a) which would allow the Secretary of State to give the corporation power to export. What legislative paraphernalia this would be! It is ludicrous to have this in the Bill. I can understand the Secretary of State reserving powers

to himself to restrict the export of gas. Obviously, any sensible Secretary of State, or Government, would want to make sure that he had powers to restrict the export of gas because he would want that national asset under his control, but I cannot see why the British Gas Corporation should be prevented over the years from manufacturing plant to sell and exporting plant and fittings. It really is dogma if this provision is left in the Bill.
12.30 p.m.
As I have said, the gas industry's sales are rapidly expanding. The Minister may say that, if we allowed the industry to manufacture for sale, this could put out of work others who are already manufacturing gas appliances and gas plant. I do not accept that view. In an expanding industry it would not necessarily be so; the industry itself could take up the expansion in this sense and it would not necessarily put out of work people who were already doing the job. There is phenomenal growth in the manufacture and use of gas appliances and fittings, and we should allow the corporation to go ahead.

Mr. Kaufman: My hon. Friend has mentioned the serious question of exports to the Common Market. Would there not be a thoroughly anomalous situation if we went into the Common Market, following the debates on the European Communities Bill in which the Under-Secretary of State took part earlier this week, in which it was made clear that under the Treaty of Paris the British coal and steel industries will have complete freedom of action, without ministerial control, yet the gas industry will not have that freedom of action?

Mr. Varley: I entirely agree. We must have an assurance from the Government that they do not intend to use this Measure in that way and that they mean the industry to have freedom.
The philosophy behind the Amendments is as follows. If the corporation is to manufacture plant for its own use, as it may under the Bill, we cannot for the life of us see why it should not manufacture equipment for sale. There is no doubt that such equipment may have an application in other industries. Why should not this nationalised industry have the benefit of going for economies


of scale if it can see a market? Why should there be these legislative restrictions on the export of fittings?
It will be ludicrous if, after we become members of the European Economic Community, the chairman of the corporation has to go to the Secretary of State and say "We have a good line of gas fittings. There is a great market for them in Europe. May we have your permission?" He ought to be able to go ahead and sell them.

Mr. Emery: I must emphasise that the powers to manufacture are provided specifically so that, if the corporation is unable to obtain from private manufacturers what it requires in its equipment, it will be empowered to do the manufacturing itself. The concept is not one of encouraging manufacture. I realise that there is a dialectical difference between us, but it would be wrong for the hon. Gentleman to give the impression that we were trying to encourage a certain factor and then stopping its export. That is not the position, and I am sure that the hon. Gentleman would not wish to deceive the House.

Mr. Varley: There is a dialectical difference between us. I understand that completely. We say that the corporation ought to have these powers. I accept that the industry is not doing much manufacturing at the moment, but the powers are there. If the new British Gas Corporation could not obtain satisfaction from traditional suppliers, it could itself manufacture for its own use. But that is as far as it goes. The experience of other nationalised industries is relevant here, though I should be out of order in going into that— —

Mr. J. D. Concannon: There is the experience of the coal industry.

Mr. Varley: From time to time nationalised industries are at the mercy of outside suppliers. I do not know a great deal about the Post Office, but I know that there are hundreds of instances in which the natural growth of the Post Office has been restricted because outside suppliers have not been able to get materials and apparatus to the Post Office in time.

Mr. Concannon: My hon. Friend will recall the time when Lord Robens, then

chairman of the National Coal Board, had publicly to threaten some of the organisations which were, as he put it, holding the coal industry to ransom with their pricing policy.

Mr. Varley: The basis of our Amendments is that the new Gas Corporation should be able to manufacture for sale. We think it perfectly reasonable and proper that it should become self-contained and diversified in that way and that, if it has export potential, at least it should be able to go ahead without reference to the Secretary of State.
On the Common Market point, it is ludicrous that on Tuesdays, Wednesdays and Thursdays in the House we should be told of all the benefits of going into Europe and on Friday we should have the Government insisting on legislative restrictions like this. It is absolutely daft. I hope, therefore, that the Under-secretary of State will accept the case for the Amendment and put this sensible provision into the Bill.

Mr. Golding: So that we are clear about what we are discussing, we ought to turn our attention first to the definitions in Clause 48, the interpretation Clause. One sees here the absurdity of the situation which the Government have created.
First,
 'gas' fitting means gas pipes, fittings, metres, apparatus and appliances designed for use by consumers of gas for lighting, heating, motive power and other purposes for which gas can be used.
I shall not dwell on the circular nature of that definition—that "gas fittings" means fittings for which gas can be used. That ought, however, to be noted. On the other hand, "plant" is defined as
any equipment, apparatus and appliances except gas fittings".
Why are there separate provisions in this respect? For gas fittings, the power is given
to manufacture … to sell, hire or otherwise supply … and to instal, repair, maintain or remove".
Why is the corporation given the power to sell, hire, install, repair and maintain
gas pipes, fittings, meters, apparatus and appliances designed for use by consumers of gas for lighting, heating, motive power and other purposes for which gas can be used
but not power to sell other plant?
In asking that question, one is probably asking about pressures which have been put upon the Minister by powerful interests outside the House. The Minister should come clean. Why do we have paragraph (g) of subsection (3)? In an intervention, he gave the game away.

Mr. Emery: I pointed it out.

Mr. Golding: The hon. Gentleman pointed out the game he was playing. Perhaps I may say in passing that, when the first draft of the Bill was prepared under the Labour Government, I was a PPS at the Department and I saw some of the representations which were made on this subsection. Subsection (3) gives the corporation power to manufacture the plant it requires without reference to the Minister. It does not matter that he tells the House that the provision is only in the Bill in case the corporation cannot obtain the equipment elsewhere. If that were to be the legal situation the subsection would have to read quite differently. It would then provide that the corporation should have the power—
to manufacture plant required by the Corporation, and to instal, repair, maintain or remove any such plant if this cannot be done by private enterprise".
If that is the situation the Minister should have the courage to amend the Bill accordingly and make the position quite clear.
The Bill, however, does not say what the Minister says at the Dispatch Box. It will give the corporation power, but the Opposition want that to be real power. We do not want legislation which is meaningless or legislation which has been drafted as a shoddy compromise between pressure from the CBI and the manufacturers of equipment and the needs of the corporation. We want legislation which is in the interests of the corporation.

Mr. Ronald Brown: Is my hon. Friend aware that the Bill means that if the Gas Corporation wants a one-off piece of equipment, which would be extremely expensive because, in effect, it would be a prototype, the corporation would be unable to exploit the value of that prototype by producing it for sale, and it would therefore cost the corporation a great deal of money?

Mr. Golding: The situation is even more serious than that. The Under-secretary is trying to make a concession to the needs of the industry but is making it impossible for the industry to exploit that need. If the corporation can manufacture its own equipment, as we believe it must, it will have control over delivery dates. One of the major objections that an authority can make against private manufacturers is that those manufacturers do not need to honour delivery dates.

Mr. Bob Brown: The Post Office is also seriously hampered by the problems of delivery dates. Although the Post Office mainly carries out research and develops the know-how, the manufacture of plant and equipment is left to private industry. Private industry has been seriously letting the Post Office down but the Post Office gets the criticism because of delays in renewing exchange and other equipment.

12.45 p.m.

Mr. Golding: I shall not follow that argument because this is a debate on the gas industry and I am sure my hon. Friends would be annoyed if I turned it into a debate on the Post Office. My experience enables me to appreciate some of the arguments that the Gas Corporation might put forward, and the argument about delivery dates is an important one. It is very important for a monopoly buyer to be in the situation that it can insist upon adherence to delivery dates.
The gas industry has contact with the consumer and also does a great deal of research and development. It will spend money on research and development. I am not an authority on the gas industry but I see around me people who are very knowledgeable on the subject.

Mr. Palmer: My hon. Friend is perfectly right on that point. If he looks at the annual report of the Gas Council he will find a list of research projects as long as his arm.

Mr. Golding: I am trying to be very careful. I am a member of the Select Committee on Nationalised Industries which is studying the way in which investment decisions are taken in those industries. Standing Orders carefully preclude me from giving to the House information which I might have obtained from


evidence given to the Select Committee. If at times I am over-cautious in giving precise details it is because I am observing the usual courtesies.
The cost of development is a serious matter. My right hon. Friend the Leader of the Opposition referred to it in 1964 when he was arguing in terms of nationalisation where a great deal of State money was spent on research and development. I am certain it applies in this case. The reports of the Public Accounts Committee over the years and the observations of the Comptroller and Auditor General show how big is the problem of the purchase of equipment by a nationalised industry from a private supplier. In terms of public ethics it would be far more preferable for the gas authority to manufacture all, or virtually all, its own equipment in order to avoid the scandalous situations which have existed in other circumstances when private enterprise has fiddled—that is not too strong a word—in the prices it has charged the nationalised industries for equipment.

Mr. Emery: Is the hon. Gentleman suggesting that the nationalised industries' purchasing departments have not been able to cope with it? That is a serious criticism which I should not want to leave this House.

Mr. Golding: I refer the Minister to the reports of the Comptroller and Auditor General and of the Public Accounts Committee. Although the Minister is inviting me to do so, I will not broaden the debate. I refer him to my speech on the debate on the Public Accounts Committee report. It would be the subject of another debate to suggest what measures the nationalised industries should take when they are faced with private industry. I would solve it in another way, by having the Gas Corporation manufacture its own equipment. That would prevent the problem arising.

Mr. David Stoddart: It is important to get this straight. Is my hon. Friend aware that the nationalised industries are often at the mercy of monopoly suppliers? The electricity supply industry at one period, to keep its prices within a reasonable range and because of the monetary situation, have to go to

Sweden to buy line equipment. What my hon. Friend is saying is absolutely correct, especially bearing in mind the drain on our external resources and the strain on the balance of payments caused by purchases abroad.

Mr. Golding: I should be straying out of order if I were to follow that argument but I would say in passing that the Post Office has just had to buy from Sweden because of an identical situation.
The control of pricing and quality presents a problem. When a public authority buys from private industry, there has to be a testing organisation within the private organisation and within the public authority. Clerical and scientific workers involved in the handing-over process could be more usefully employed. Many arguments could be advanced for a more integrated system of production and distribution. I am sure that so far the Minister will agree with my arguments and accept the logic of what I say.
Now we must diverge. Whilst private industry is manufacturing the equipment, somebody somewhere is earning profit. That profit is going into private pockets.

Mr. David Stoddart: Some of it to the Tory Party.

Mr. Golding: As my hon. Friend says, some of it goes to the Tory Party. He knows much more about this subject than I do and he is much more cynical than I am. He will perhaps be able to tell us how Clause 2(3)(g) has been sneaked into the Bill. It may be because of a contribution to the Conservative Party, but I am not cynical enough to believe that solution.
The profit that is going into the pockets of the manufacturers is not available for investment in the gas industry. The gas industry needs the investment of a considerable amount of money. That investment can be obtained either from the consumer from higher tariffs or by borrowing, which ultimately comes from the pocket of the taxpayer. But there is a third source of investment, which is to take the profits, which are at present being taken by the private manufacturers, from the sale of equipment to the gas industry. There are overwhelming arguments why the industry should manufacture its plant.
The Amendment provides that the corporation should also be allowed to manufacture plant for sale. Of course it should. What are the Government worried about? Are they worried about competition? If they think that the Gas Corporation is so inefficient that the plant it produces will not be saleable in direct competition with private industry, what are they worried about? But that is not so. They know full well that, as the nationalised industries get more and more competitive and become more and more efficient, private industry becomes more and more afraid of State competition. People are increasingly realising that the problems facing the country are problems of the failure of private enterprise.
As my hon. Friend the Member for Chesterfield (Mr. Varley) argued, by manufacturing equipment for sale the corporation would be able to get the advantage of economy of scale. Certainly, however, it would be utterly unreasonable to deny to private industry any development progress made by the gas authority.
There are general economic arguments, too, why the Gas Corporation should have this power. In the last 12 months it has been interesting to see how the Government have changed their attitude towards the State industries. Before the General Election we heard talk of running down, failure and the uselessness of nationalised industries. Since then the nationalised industry chiefs have come under pressure to increase investment and to expand, because private business has less confidence in the Government. If our Amendment were carried, it would make it possible to say to the Gas Corporation, "Please increase your manufacture of plant".

1.0 p.m.

Mr. Sydney Bidwell: Does my hon. Friend not agree that it is the feeling among ordinary people that the nationalised industries, in this case the gas industry, are being denied proper opportunity to make profits and that, instead, any profit is being turned over to private interests and private squandering, and that this has a great deal to do with the present inflationary problem? In view of all the money that is being squandered in this way, are not workers

having to increase the pressures by wage claims and so on?

Mr. Golding: My hon. Friend has put his finger on the point. In regard to the corporation having a right to manufacture and sell, the one advantage of expanding a public enterprise is that the enterprise is used for the benefit of the public. My hon. Friend the Member for Southall (Mr. Bidwell) at one time worked in a nationalised industry and we must never forget the importance of the security of employment for work people. This is why we should like to see the powers of the Gas Corporation extended so that it can sell the plant which it manufactures. There would thereby be a greater degree of security of employment. I am sure many of my hon. Friends will wish to elaborate on that point.
I turn to the other Amendment, which deals with the provision in the Bill that the Corporation shall not have the power to manufacture gas fittings for export. Is not this provision an utter absurdity?

Mr. Bidwell: Sabotage.

Mr. Golding: My hon. Friend is quite right—it is sabotage. The very day after we discussed the collapse of the £ sterling, we are now discussing a Bill to prohibit exports.

Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. The hon. Member must discuss an Amendment, not a Bill.

Mr. Golding: You are quite right, Mr. Deputy Speaker. You have been very patient, so I shall quickly say that I am dealing with Amendment No. 8, which seeks to leave out lines 5 to 7 on page 4. Our Amendment shows that we are opposed to a Bill which prohibits exports.

Mr. Kaufman: My hon. Friend, with great respect, is not right. The sheer lunacy of paragraph (b) is not that it forbids exports but that it forbids manufacture for export. Therefore, presumably, if something were manufactured for home use and found to be surplus to home requirements and if it could be proved to have been manufactured for home use, there would be no ban on the export of it. The lunacy of the provision is that some things specifically manufactured for export cannot be exported, whereas something manufactured for home use can be exported.

Mr. Golding: I take my hon. Friend's point.

Mr. Bob Brown: He is sharper than a needle.

Mr. Golding: My hon. Friend is even sharper than a needle. He has put his finger on it. That intervention has almost ruined my speech. Assuming that the Government are not as foolish as my hon. Friend has, revealed them to be, I feel that we must still speak to this Amendment. They will no doubt say that their intention is that these goods should not be exported.

Mr. Kaufman: The road to hell is paved with good intentions, just as in this case the road to heaven might be paved with bad intentions. What the Government intend to do is neither here nor there, as two years of their policies have shown. What we are concerned with is the outcome of the legislation which they are putting through the House. The subsection says what it says, and no assurance from any Minister will change its validity in a court of law. My hon. Friend is, most uncharacteristically, being too kind to the Government.

Mr. Golding: I accept my hon. Friend's rebuke; he is right. I agree that paragraph (b) is lunacy. We see in Clause 2(3)(h) that the corporation will have power
to manufacture gas fittings, to sell, hire or otherwise supply gas fittings, and to instal, repair, maintain or remove gas fittings.
In total it can provide for the whole market; it does not need permission or authority. If it has any sense, it will take to itself complete production. There is nothing in the Bill to prevent the Gas Corporation from producing gas fittings. Since it is virtually a monopoly buyer, it could say to all other firms, "We shall not purchase your product" and the corporation could become the sole manufacturer. One would then have the lunatic situation that when facing the problem of exports the chairman would have to sneak off to lunch with the Minister and say "Please may we use some of the unemployed workers to produce gas fittings to sell abroad?" What sort of a nonsense is this?

Mr. Bob Brown: My hon. Friend is over-simplifying the issue. He is suggesting that when we reach this desperate

situation the chairman of the corporation can go cap in hand to the Minister and plead with him to allow the corporation to sell abroad. However, unless our Amendment is accepted, the Minister will not have any power to yield to any pleadings of that sort. Does my hon. Friend agree?

Mr. Golding: I should need advice on that before I could answer my hon. Friend. Obviously, he is more knowledgeable about this industry than I am. Apart from the interest that I declared in the Select Committee on Nationalised Industries, I approach these problems as a layman. I come to them afresh, and I look at the absurdities as they appear to any man in the street.

Mr. Kaufman: There is a further absurdity of which it is necessary to take account if my hon. Friend is to approach anything like comprehensivity. He will see that the Bill says in page 3, line 43:
shall not, except with the consent of the Secretary of State and in accordance with any conditions he may attach to his consent".
In moving the Amendment, my hon. Friend the Member for Chesterfield (Mr. Varley) has made the point that the Minister takes pride in the fact that this will prevent exports to the Common Market. Are we to have a lunacy in which the Secretary of State tells the corporation that it may export provided that it does not export to Common Market countries since the Government have specifically excluded exports to them in a letter to the hon. Member for Chesterfield?

Mr. Golding: I was about to come to that point. I spoke about the possibility of the chairman having lunch with the Minister and asking him for permission to export. In that event, I can imagine the Minister sitting back, looking at the chairman and saying, "Well, yes", and then his PPS, assuming that he is present, taking out of his pocket a copy of the letter and saying "But, Minister, it is in accordance with any conditions that you may attach to your consent."
What a ridiculous situation? What conditions would the Minister attach? What circumstances would he take into account? At the beginning of their lunch, the Minister may well have said to the chairman of the corporation "You


will maintain an 11 or 12 per cent, greater return on your capital investment," and then at the end of the meal he may say "Yes. You may export gas equipment, but you had better export it only to those countries which use electricity or coal." That is the situation which could arise under the Bill—

Mr. Bob Brown: And this Government.

Mr. Golding: Yes, and this Government. That is the situation which could arise, and it is a nonsense. We want to increase our export market. Are the Government saying that if these exports are made by publicly-owned industry they are bad exports or exports which are to be controlled, but that if they are privately made for private profit they are good exports?

Mr. Kaufman: The point that my hon. Friend is making is that the Government are saying in this connection that exports shall be conducted only between consenting adults in private.

1.15 p.m.

Mr. Golding: That about sums up the situation.
I had not given it a great deal of thought earlier. When I was PPS to my hon. Friend the Member for Chesterfield, I was involved in a better version of this Bill in the then Ministry of Technology. However, the hiving-off provisions did not appear in the equivalent Clause. As I think about the situation, what worries me is that there may be grounds for the innuendoes which were made from behind me earlier that there may have been undue influence on the part of private capital on the Government when they inserted these conditions in the Bill. If we examined the contributions made by private industry to the Conservative Party at the last General Election, it might be possible to make some deductions why the Government have been driven into this absurd situation.
I have no wish to detain the House, and I know that many other hon. Members—

Mr. Ronald Brown: Before my hon. Friend draws his remarks to a conclusion, perhaps he will consider para-

graph (b) and the example of a caravan which has been supplied with gas fittings manufactured by the corporation. We have a vast export in caravans. Paragraph (b) will preclude the corporation from providing fittings for caravans which are to be exported.

Mr. Golding: I had not thought of that possibility. It may be that the caravan builders do not loom large as contributors to Conservative Party funds. Certainly that has been my impression recently. Caravan dwellers have been objecting to the excessive rents for land that they are being charged by private landlords. But certainly that is a point, and it is one that the Government have to bear in mind. It may be that it will apply to a wider range of commodities than caravans. My hon. Friend the Member for Shoreditch and Finsbury (Mr. Ronald Brown) has highlighted the absurdity of the situation.
It had not been my intention to intervene in this debate. Hon Members will know that my main interest concerns the Post Office. There are others of my hon. Friends who have a great deal of occupational interest in the gas industry— —

Mr. Bidwell: Perhaps before my hon. Friend concludes his remarks he will consider one further point. I had the impression earlier that he was just about to come to the second part of his speech. However, that now appears not to be the case. When the Government were drafting the Bill deliberately to exclude the nationalised gas industry from taking any part in the export drive, it could not have been in the Government's mind that the £ was about to be devalued. Financial experts inside and outside this House have pointed out that, although the first impact of the situation is injurious to Britain, later there will be greater export opportunities arising from it, when it will be very much a case of all hands to the pump to take advantage of these great new export opportunities. In view of that, is not my word "sabotage" entirely appropriate?

Mr. Golding: I did not want to dwell too long on that point. A matter on which I was going to seek technical advice, but did not have time to develop, concerns uniformity of gas fittings. I am


certain the time will come, if it has not already arrived, when we shall be exporting gas from the North Sea to Europe. For example, Post Office cable ships, which cable from Britain to other countries, can be said to be exporting that cable. So the time may come when we shall be laying gas pipes from Britain to foreign countries. The absurdity is that, according to the Bill, a pipe is a gas fitting, and if the Gas Corporation wanted to lay a gas pipe from this country overseas it would have to go to the Minister to get permission.
That is a technical matter with which I should prefer others of my hon. Friends to deal. As I have said, I have little knowledge of the gas industry. I am sure other hon. Members have much more to contribute.

Mr. Ronald Brown: Like my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), I am very concerned. This is a shabbily drafted document. The two Amendments are relevant to the problems facing the gas industry and are very much an integral part of its opportunity for the future. If the Government are to encourage the Gas Corporation to develop and research, to go forward and challenge the frontiers of knowledge, it seems ludicrous to place parameters on it which will inevitably make it impossible for it to do so.
The Government have the peculiar dichotomy that, on the one hand, they wish to portray themselves as the friends of research and development, but, on the other hand, that leads them into a dangerous situation where they have to permit nationalised and other industries, after research and development has taken place, to engage in its exploitation. The Bill is a real attempt to ensure that the exploitation of research and development does not take place. This is outrageous. I, like other hon. Members, serve on the Select Committee on Science and Technology. The whole burden of our investigations and arguments over past years has been an examination of the failure of our industries to exploit the results of research and development.
We are very clever at research and development, but we never go beyond that. We find this country's expertise being exploited in other parts of the world, and we then have to pay royalties

if we use it. I thought we had at last arrived at a situation where Governments of all political persuasions had come to the conclusion that this country cannot afford to have a vast research and development programme but not to exploit it. The Department of Trade and Industry is essentially the Department for ensuring the exploitation of research and development. Therefore, I do not follow how the Minister can sit there with equanimity and say "By the way, having funded all this money for research and development, you cannot use it".

Mr. Kaufman: Surely my hon. Friend is being kinder to the Government than he need be. There is not only research and development for specific purposes but spin-off. By spin-off one discovers things one did not mean to find which can be exploited commercially.

Mr. Ronald Brown: My hon. Friend is absolutely right. I was going to develop that point. It is rather sad that attendance is so thin on the Government benches. The Government have chosen to be the experts in this area, and they must make their assertion today. They are saying that research and development will not be pursued with the vigour which we have hitherto thought necessary. That must be so, and people in the gas industry must be aware of it. The Gas Council in its report talks about the enormous amount of research and development that has taken place during the year 1970–71. My hon. Friend the Member for Bristol, Central (Mr. Palmer) drew attention to that fact. We know about the development of appliances for rapid heating furnaces and for premium loads. Particular attention is being paid to environmental aspects, noise problems and the significance of low level pollutants in the gas combustion product. All these matters are not only vital to our economy but, clearly, of tremendous importance to other countries. There seems no point in the United Kingdom sending a representative to Stockholm to discuss environmental pollution when the Government will preclude the Gas Corporation from exploiting research and development in that direction.
It seems that the Government have something to answer for. I am not prepared to accept just a flip of their hands and hear them say "It does not really


matter. Alter all, under subsection (4) the Secretary of State will be able to make any conditions he likes." The Government must spell out in greater detail what they mean by "any conditions". Am I to understand that they are saying today "Regarding the research and development that the Gas Council is undertaking, we do not really mean that if it happens to produce a spin-off which is valuable to and desired by the world at large the Secretary of State will say that that cannot be sold"? I do not know whether the hon. Gentleman wishes to intervene to help me. I assume that he will allow the Gas Corporation to exploit the results of this issue if any countries desire to have it. I will work upon that theory. If I am wrong, perhaps the hon. Gentleman will tell me. However, if I am right, it makes a nonsense of paragraph (b). There is no point in paragraph (b) if they are saying that the Gas Corporation cannot export it.
This comes over more with standardisation. We are members of international committees—I do not remember the number—dealing with standardisation. What is the purpose of our manufacturers, particularly in the gas industry, which has a special expertise, going to various international meetings on standardisation, producing for observation the results of their research and development, and having them accepted as the standards to be used in Europe, and then, when people in Europe wish to use those standard fitments, having to tell them: "We are sorry. We work in a funny way in this country. We have developed these fitments and shown you what we have got. They are the best in the world and they are going to be standardised. But our Minister says that we cannot sell them to you"? It is a ludicrous position.
How the Minister can just lay on that Front Bench and look at this thing in the hope that at the end of the day he will be able to have his Lobby fodder pushed in and get the Bill through, with nobody to hear and discuss it, is outrageous. I hope that the Government will have another look at the situation. Whichever way one examines the matter, these restrictions on the work or the results of research and development are outrageous.
1.30 p.m.
In an earlier intervention I suggested that if a commodity sold abroad contained equipment manufactured by the Gas Corporation in accordance with its rights under the Clause it would be in contravention of subsection (4)(b). I hope that the Minister will be able to clarify the position which could arise with the export of a caravan which is perhaps one of the best examples of a manufactured item containing fitments which have been designed and manufactured by the Gas Corporation. I should like an assurance that the caravan industry will not have to export caravans divested of their gas fittings and equipment because those fitments have been manufactured by the Gas Corporation and are therefore subject to the limitation in paragraph (b).
The Minister seemed to suggest that that would not be the position, and I should be delighted if it is not, but I understand that whether the fitments are sold as a job lot or as part of another commodity they will still come under the limitation in paragraph (b) which says that the Gas Corporation
shall not have power to manufacture gas fittings for export".
The gas fittings in the caravan will be exported, and it is, therefore, no good the Minister saying that that paragraph will not apply. I hope that the Gas Corporation will not be debarred from exporting such of its manufactures as it evolves from its research and development programmes, and I cannot understand why the Minister has included paragraph (b).
I trust the Government will look at this again. The Opposition Amendments are reasonable. I support Amendment No. 6, and if it were accepted subsection (3)(g) would read:
to manufacture plant and to sell, instal, repair, maintain or remove any such plant".
Implicit in that is the provision that the Gas Corporation can sell its manufactures, provided that that paragraph is read in conjunction with other paragraphs in the Clause. I do not necessarily believe that it is necessary to write in this provision, but I understand the caution of my hon. Friends in wanting to see the relevant words in Bills prepared by the present Government rather than having to reply on intellectual judgments to decide


whether something is implicit in the words in the Bill.
I am not firm on Amendment No. 6, but I am on Amendment No. 8 which seeks to delete the paragraph (b) which says that the corporation
shall not have power to manufacture gas fittings for export".
That provision cannot be put into operation unless we wish deliberately and wilfully to ensure that, while under subsection (2) the corporation has power to carry out a tremendous amount of work, it cannot exploit the products which it evolves as a result of research and development. Natural gas is coming into use more and more in various countries and our gas industry is already regarded as par excellence. Certainly the Continent of Europe is looking to us for help. The countries there have watched our developments over the years, and one of the biggest areas for sales during the next five years will be the Continent. In spite of that, the Minister is saying that the corporation should be precluded from manufacturing gas fittings for export.
I do not know whether there is something clever in this and it is being said that because we shall join the EEC in January we shall no longer be exporting. If that is what the Minister has in mind, he is being rather subtle, but I am prepared to be persuaded to the view that if we are in the EEC we shall no longer be exporting but that the goods will be kept within the family, as it were. That would, to a certain extent, make sense, and I should be prepared to accept it. I hope, however, that the Minister will explain the position as it relates to America, Japan and vast markets in other countries in which natural gas is being used as a commodity of energy.
I hope that the Minister will answer the points that I have made. I am prepared to be persuaded about Amendment No. 6, but ask him to look at subsection (4)(b) because, if it is left in the Bill, it will destroy the opportunities which will otherwise be open to the Gas Corporation and will waste a tremendous amount of effort expended by our scientists and technologists in the gas industry who are doing so much to challenge the existing frontiers of knowledge in their industry.

Mr. Bob Brown: My hon. Friend from the other Newcastle, that Midlands village of Newcastle-under-Lyme, (Mr. Golding), has covered so much of the ground so adequately that I do not propose to detain the House for long.
I support these two Amendments because, if accepted, they would improve the quality of the Clause. Subsection (1) says:
It shall be the duty of the Corporation to develop and maintain an efficient, co-ordinated and economical system of gas supply for Great Britain …".
If the Government accepted the two Amendments they would facilitate co-operation in developing and maintaining such a system, and they would certainly make the job of the corporation much easier.
Paragraph (g) authorises the corporation to manufacture plant which it requires. That is a laudable provision, as is the provision enabling the corporation
to install, repair, maintain or remove any such plant".
It should be clear to the Minister, however, and particularly to the Minister of a private enterprise Government, that if the corporation is to be successful in the manufacture of plant for its own use that plant will be cheaper if it is also allowed to sell what it manufactures.
We know that it is research and development which puts up the cost of manufactures. If the corporation merely manufactures products for its own use, it is clear that it will be lumbered with tremendous research and development expenditure. As my hon. Friend the Member for Shoreditch and Finsbury (Mr. Ronald Brown) said, the industry is lumbered with this expenditure now. One of the contentions of the Post Office is that, the equipment having been perfected, that equipment is then handed over to private industry to be manufactured and the taxpayer is milked by private industry. This arrangement is just not on.
I could understand it if the Government had said "So doctrinaire are we, so much against public enterprise and in favour of private enterprise are we, that we are introducing the Bill in order to denationalise the gas industry and so show that we disbelieve entirely in public


industry." But they are not saying that. They are replacing 16 area boards with a monolithic national corporation.
If the Government insist that the nationalisation of the gas industry is right—I do not think even the wildest Tory Members would argue that it would be common sense to put the manufacture and distribution of gas into private hands—if they are giving the right of manufacture of plant to the industry it seems obvious good sense to extend the right of manufacture to the right of sale.
Amendment 8 seeks to delete the words
shall not have power to manufacture gas fittings for export.
The research and development argument applies equally to this Amendment, because if the industry has a massive export potential the unit cost of production must be very severely reduced. The cost of the individual items which the corporation would be selling to its 13 million consumers at home would be so much reduced by that export potential as to have a direct bearing on the cost of living. In the present circumstances of a floating-sinking £—

Mr. Ronald Brown: The point my hon. Friend is making is well brought out in page 42 of the Gas Council's report, which shows that about one-tenth of one new penny per therm is committed to research and development.

Mr. Bob Brown: I am grateful to my hon. Friend for his intervention, though I thought that more was committed.
As I was saying, in these days of the floating-sinking £the Chancellor of the Exchequer in particular should be interested in reducing the unit cost of production. Such a reduction must also have a bearing on the raging inflation from which we are suffering, and that in itself should commend these Amendments to the Government.
I am delighted that the Government have seen fit to allow the British Gas Corporation to engage in the mass manufacture of fittings. Throughout my 30 years of service in the industry it always struck me as complete nonsense that within each of the 12 boards there could be 10 divisions, every one of which could be purchasing different types of fittings from different suppliers. It always struck

me as nonsense that Sunderland could install a sink heater with one fitting, Newcastle could fit another type and Carlisle, on the other side of the area of the Northern Board, could use yet another size and type of fitting. Yet that practice went on for years. Only direct manufacture by the corporation can meet that problem. If there are items which it is not economic for the corporation itself to manufacture, a system of central buying should be established.

1.45 p.m.

Mr. Emery: The Government do not see their way to accepting either Amendment. The hon. Member for Chesterfield (Mr. Varley) said that it was intolerable that the British Gas Corporation should not be able to export gas fittings to Europe without the consent of the Secretary of State. This is a misunderstanding of the position. The Secretary of State has no power to permit the export of gas fittings, nor will the corporation have that power, nor in fact does the Gas Council now have such power. This is a point that most Opposition Members have missed.
The hon. Member for Shoreditch and Finsbury (Mr. Ronald Brown) referred to the spin-off from research which might come from export or manufacture. I must make it quite clear that in order to benefit from research and development one does not necessarily need to do the manufacturing oneself. I and others have been associated with companies benefiting considerably from research and development through the licensing factor. In many cases the easiest way of getting a quick return from research and development is a licensing procedure, which would apply at home and abroad.

Mr. Ronald Brown: I am sure the Minister will agree that whilst he may well be right in what he says, he could amend the Bill to allow such judgment to be made, so that if that were the better way it could be used, but at the same time allowing the corporation to export directly if it so desires.

Mr. Emery: I appreciate what the hon. Gentleman says, but I do not think it is necessary to make such a provision in the Bill. It is well understood that that is the existing situation, and I do not think that to clutter legislation with what


is already well known and understood would necessarily be of benefit to the operation of the Bill.
Amendment No. 6 would extend the corporation's power to manufacture plant of any kind and to sell any such plant. It is fairly clear, and the arguments apply equally to this Amendment as to Amendment No. 8, that the organisation of a nationalised industry is set up to use public money for certain specific purposes. It has always been, strangely enough, a Conservative Government's approach, and to some extent the approach of Labour Governments, to ensure that nationalised industries stick closely to their primary function, which, in this instance is the supply of gas.
The powers of manufacture contained in the Bill are intended as a reserve power against unreasonable action by manufacturers or circumstances in which the manufacturers cannot meet the industry's requirements either in time or in quantity. In these cases the manufacture of plant by the corporation for its own needs may be justifiable, but the manufacturing and selling of any other plant would be a very considerable extension of the corporation's function, and such manufacture and selling is not an initial requirement of the industry. It may be fair to say that this is a difference in dialectic between the two sides. If the State wished to have a State undertaking engaged in manufacturing a broad range of plant, it would be much more appropriate to set up a suitable body for that purpose rather than to allow the gas industry to diversify itself into that particular field. Therefore, I urge the House not to accept the Amendment.
As for Amendment No. 8, to have the Gas Corporation manufacturing for its own customers may in certain circumstances be reasonable and sensible, but manufacturing specifically for export surely goes much too far. It is the type of extension about which I was talking during a previous argument I was putting forward. The prohibition which is present and proposed reflects the general policy that powers of manufacturing are intended only as a reserve power against unreasonable action by the manufacturers. It is important for us to realise, therefore, that the situation is such that to set up an organisation specifically con-

cerned with an export function is not one which would be ideal or be thought in most businesses to be beneficial to the gas industry.
I come to the question posed by the hon. Member for Shoreditch and Finsbury who suggested that if the industry was making a one-off piece of equipment—which is often somewhat more expensive simply because it is one-off—it should be allowed to export that idea to Europe or anywhere else. By definition, however, that is a strange argument. The creation of a one-off piece of equipment for a specific plant that is not available is very unlikely to be something which will be exportable simply because it is one-off for a specific purpose. That argument falls very heavily to the ground.
Overall, we are saying that the limited powers that are given for manufacture of plant and fittings are for specific purposes within the industry. They are not meant as a general exporting factor, which would be going very much further than the new Gas Corporation is being set up to do.
For those reasons I ask the House to reject the Amendment.

Mr. Kaufman: The Under-Secretary was very honest with the House when he said that the Amendments involved a difference between the two sides of the House which was a difference of dialectic. That is true, and it is a fundamental difference. Although the hon. Gentleman advanced his arguments with the sweet reason we have come to expect of him in these debates, his arguments were nevertheless based on wrong-headed reasoning. Even at this late stage, I hope that he will reconsider the matter, for the following reasons.
The Gas Corporation will be a major factor in British industry. We do not know what form it will take in the future. On a previous Amendment, my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) strayed out of order when he talked about the way in which industries founded to do one thing can turn out, through force of circumstances or historical events, to become responsible for something else. My hon. Friend was out of order on that Amendment, but what he said is extremely relevant to this Amendment.
I am astonished that a Government which assume themselves to be a Government of businessmen should take so static a view of the future on what is an industrial enterprise in this country. The fact that it is based upon a public utility and that it was brought about by an Act of Parliament is at this stage of the game, nearly a quarter of a century later, neither here nor there. The fact is that the Gas Council—the Gas Corporation as it will become—is an industrial enterprise comparable with ICI, British Leyland and many other enterprises which have been the dynamic factors in British industry.
Although the Amendments look small, they are very important in that if the Bill does not contain them it will hobble the progress of what ought to be a major factor of British industry in the future. It is all very well for the Under-Secretary to say that the Gas Council was set up with a specific function and that the transfer of functions involved in the Bill simply transfers that function, with certain modifications, to the new body. But we ought to take an entirely different view about how this organisation should progress, and these Amendments would help us to do so.
The National Coal Board has diversified to a certain extent. As I mentioned earlier, it got involved in theatre ticket bookings. It is a part-owner of the new London Weekend Television headquarters on the South Bank. These are things which are of advantage to the National Coal Board financially. But, regardless of that, if this had been done by other than a nationalised organisation no one would have questioned it in any way.
All industry in Britain today believes that it must diversify in order to prosper, that it cannot stand still because to stand still is to ossify. I see that in the United States—again
analogously—MGM, which has almost given up making films, is now building hotels. It is to the advantage of the gas industry in Britain that it should be allowed to expand in whatever way is consistent with two factors. The first factor is that it does not diminish or undermine its main purpose of providing gas for domestic and other use. The second factor is that it does not go into wild interventions which are financially wasteful and risk what is a national

property. But, within those two limitations, it is perfectly suitable for the Gas Corporation to manufacture whatever it sees fit to manufacture within the context of its plant and the workers available, and the training of those workers.
I should have thought that a Government which came to power on a manifesto the famous page 14 of which said that they would reduce their involvement in the running of the nationalised industries would not then say that a nationalised industry which ought to be run on a businesslike basis can proceed to two essential things, diversification and export, only with the specific permission of the Secretary of State for Trade and Industry. The Government have got their whole attitude to our industry in an extraordinary muddle.
When it comes to CBI price initiatives, the nationalised industries are regarded as comparable with private industry and, indeed, are asked to be pace setters for private industry. Yet when it comes to diversification, the nationalised industries are told that that is not so. Let us imagine where British industry would be today if Lord Stokes had had to ask the permission of the Secretary of State for Trade and Industry before he tried a new model of motor car. This is exactly what the Bill lays down with regard to the Gas Corporation. The Bill says that the corporation shall not be permitted to operate as a commercial enterprise. Although it is insisted that the corporation must make profits, which it is doing like any commercial enterprise, it must operate in a strange, restrictive atmosphere.

Mr. Ronald Brown: Has my hon. Friend's attention been drawn to paragraph 172 of the annual report of the Gas Council, which specifically details the major efforts the council has put into the freer interchange of equipment? Yet the Minister now seeks to secure the exact opposite.

2.0 p.m.

Mr. Kaufman: I am grateful to my hon. Friend for reading that into the record, because it shows that the corporation has the enterprise and the wish—we all know that it has the know-how—to expand in various ways. What most worries many hon. Members on both sides and has been echoed this week in leading articles in The Guardian and


the Mail, amongst other newspapers, is the fact that Britain will slip back; that, having been a rich, prosperous, innovating country, it will become a backwater, overtaken by other countries in Europe and elsewhere.
Yet the Bill deliberately inhibits an industry which my hon. Friend the Member for Chesterfield (Mr. Varley) has described as the fastest growing industry in Britain, even on the limiting terms it has had to endure so far. The Bill will deliberately prohibit the industry from going ahead and trying further to innovate, to make profits, and to provide employment.
I cannot understand how a Minister who introduces a Bill which contains Clause 38, with its specific provisions for asking the corporation to root round and find ways of employing people can at the same time write into a Bill a provision which prevents the corporation from finding ways of employing people. It is all very well for Clause 38 to provide that the corporation should get its spades out, dig around and try to do something, and that the Government will give the corporation £5 million if it does create a job here and there. Heaven knows that we need those jobs.
In any event, an expansion of the kind which would be possible under the Amendments is far more likely not only to provide more jobs but to provide what the Prime Minister, in the days before the "lame duck" policy was abolished, used to call real jobs—jobs which are not invented for a short period to tide the country over a situation of economic recession but which will provide continuing employment at good wages to make goods which people wish to buy and which people abroad wish to buy from us.
I am astonished at the fact that Amendment No. 8 is necessary. It is recognised on both sides of the House that we shall enter a period when the balance of trade will move against us. This was our experience after the 1967 devaluation. Before the turn round, with the terms of trade moving against us, the import surplus mounted up.
Following the devaluation of a week ago, the same thing will certainly happen. It is part of the process of devaluation, because the terms of trade

move against us. That being so, when we need every pennyworth of exports that we can get to provide employment in areas such as mine, where unemployment is twice what it was when this Government came to power, when we need exports to give us the foreign exchange to pay our entry bills into the Community, when we need exports to do something to help us to give overseas aid, which the Bill provides for, to have a Bill which specifically prohibits a major element of British industry from exporting strikes me as the politics of the madhouse.
If I were to have a private talk with the Minister I bet that he would agree with me; but, unfortunately, he has to abide by his brief. I hope that even now the Minister will reconsider the whole situation. Recently the Parliamentary Secretary to the Civil Service Department won great credit in the House by saying that a mistake had been made and was to be put right.
The Under-Secretary could win even more applause than he has already won during his tenure of office if he would say at the end of the debate, when all my hon. Friends have spoken, what I am sure he believes; namely, that he is convinced by the case we have made and that he will accept the Amendments.

Mr. Garrett: These Amendments have more merit than the Under-Secretary recognised. I know he is a man with tremendous tenacity and staying power, as is shown by the fact that he has stayed on the Treasury Bench continuously today without the assistance of another Minister, which I think is deplorable.

Mr. Emery: My hon. Friend the Minister for Industry was on the Treasury Bench for at least half an hour.

Mr. Garrett: In that case I apologise. I was not in the Chamber when that Minister was present.
The arguments are clearly defined in terms of political ideology. I do not share the optimism of my hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) that the Minister will change his mind.
This makes me sad, because it is not generally known that agreements relating to the exchange of technical know-how and installations exist between private


manufacturers in Britain and some Continental countries, particularly France, where natural gas is much more highly developed than it is here. I have no doubt that Britain will catch up with the French method of distribution of natural gas. Humphreys and Glasgow has agreements with Sofregas, which is the French combination of private and public capital.
The proposals in the Bill limit the operations of the corporation relative to any exchange of information with any EEC countries, for instance. Although Britain may well join the EEC, the provisions of the Bill will deny the corporation the right to manufacture or sell to organisations on the Continent. The Minister's predecessor, although recognising this, gave no answer to allay our fears. The fears are just as valid now as they were when they were argued in Committee.
It is right for the corporation to be able to sell its know-how. In my constituency are the headquarters of the Gas Research Council which is developing know-how to an amazing degree, to such an extent that the results of the research are in demand by private industry. I am not against private industry having this information. It is good for private industry to be efficient in the best possible way. Here, however, we have the situation that the profit from the know-how which will ultimately emerge from the Gas Corporation's activities will be denied not only to the corporation— —

Mr. Bob Brown: Will my hon. Friend accept that much of the know-how to which he refers comes from those with years of service in the industry and that this fact is recognised by the gas boards? Would it not be better if those with the interests of the industry at heart, who are earning their bread and butter in the industry, could see their ideas developed and marketed by the industry?

Mr. Garrett: Yes. That is precisely what I mean. Perhaps I should give a practical example. Suppose that the gas industry developed a new valve, a regulator for a valve or a completely redesigned new valve. Under this Clause the industry will not be allowed to sell it to ICI, Fisons, Shell Chemicals or BP Chemicals where that type of valve could

be put to appropriate use. It would seem wrong that the private sector should be denied the use of the technical skill which has brought about that product. Similarly the taxpayers, who after all are entitled to their share of profit, would gain if there were less restriction of the kind provided in the Clause.
I hope we can get the Minister to have another look at this point because this is one of the most important parts of the Bill. To resist our suggestion now could create much more trouble for the corporation in the future. To concede that we have argued a good case would not in any way weaken the Minister's standing in the eyes of hon. Members.

Mr. David Stoddart: I have been listening carefully to the debate, and the speeches have been excellent and well-informed. My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said that he thought I knew something about the gas industry. I suppose I know about as much as anybody else, as I was employed in the electricity industry. There are certain similarities between the two industries and particularly in the way in which they are run.
I was very impressed by the arguments adduced by my hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) particularly when he spoke of the need for the gas industry to be in an equal position with private enterprise industries. In these days of conglomerate empires, very often the manufacturers who under take a great deal of research and pay a great deal of money on research say "Why should we not have the full benefits of this research and therefore diversify?" As my hon. Friend remarked, there is no reason why the gas industry should be in any different case, except that the Government apparently deliberately want them to be in a different case. What the Government intend for the gas industry and, indeed, for other nationalised industries is that they should get the neck of the chicken and that others should derive the main profitable benefits from the activities of our nationalised industries which are set up and sustained by public capital.
2.15 p.m.
Thus we find that the gas industry is permitted, and indeed encourage, to do the heavy, unprofitable end of the job


while others get the candy-floss. If the gas industry happens to make a loss on occasion, it then becomes the butt of criticism from the Tory party and the fact appears in political manifestos throughout the country. We are seeking to enable the gas industry—and I hope it will set a precedent for other industries—to have some of the candy-floss and benefit from some of the profits which are derived at the candy-floss end.
Furthermore, we often get complaints from the gas industry about the non-supply of equipment and delay in installing equipment when it has nothing to do with the Gas Council. These problems arise because of suppliers' delays and the inability of suppliers to provide the equipment. Therefore, it would be well if the gas industry could undertake a job at the start and carry it through to the finish in the knowledge that it had the job under its complete control.
The question of price has been mentioned. I feel sure that if the gas industry were allowed powers of manufacture and sale, the consumer would benefit greatly. Many people are not aware of the vast difference between the manufacturing cost and the cost of the article when it reaches the consumer. Indeed, in the case of many appliances—I am not relating these remarks specifically to gas appliances—the manufacturing cost is multiplied four- or five-fold before it gets to the consumer. If this happens with gas appliances, the consumer is indeed being taken for a ride.
If the Government want to do something about inflation, if they want to reduce prices and benefit the consumer, one way of doing this is to ensure that the nationalised industries, which are not set up mainly for the sake of pursuing profit, should provide the equipment which is necessary for the consumer. This would be a real contribution to a reduction in the cost of living. It would be a real contribution to the stabilisation of the cost of living and would also contribute to a solution of the unemployment problem.
I am sure that if the Government were to accept this Amendment the TUC would be pleasantly surprised and would at least take some hope to the talks which are to be held next week. It would show another change of direction on the part of the

Government, a change of direction for the better, which could be supported by all men of good will, particularly in the trade union movement.
Reference has been made to exports. At this time when our economy has been brought to a new low level by stupid, foolish, premature actions by the Government, it is necessary for this country to export as much as possible at a very competitive rate. It seems to me that people abroad would take it as an earnest of good intentions if we were to say that Britain, through all means possible, would do what it could to produce goods for export at highly competitive rates. The Amendments offer one of the ways of doing just that.
I join my hon. Friends in urging the Government to reconsider their policy on this matter in relation not only to the gas industry but to other industries. Let them get down to it. Let them accept the Amendment and thereafter make it possible for our great industries to be so equipped as to be able to do their job to the full.
I am always prepared to make a constituency point and I take this opportunity to add a word in that context. If the Gas Council, or any other nationalised industry for that matter, wants places and machinery for manufacture, I can offer excellent premises and facilities in Swindon. With the concurrence of the present Government, activity in the railway locomotive workshops is being run down and there will be vacant space. If manufacturing capacity is needed, it can be provided.
I am sure that, if the Minister considers seriously all that has been said, he will agree that it is sound sense and that, for the sake of his own Government and the sake of the nation's economy, he should accept the Amendments.

Mr. Michael Cocks: Like my hon. Friend the Member for Swindon (Mr. David Stoddart), I shall be brief, for we are anxious to make progress, and it is only the Minister's stubbornness today, as on last Friday, that is holding us back.
I agree entirely with my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) when he says that the Government, in resisting the substance of


these Amendments, have yielded to pressures upon them from outside, pressures concerned with private profit. But this is a covert yielding to financial pressures, a more masked result of yielding than was the overt yielding we witnessed when the Government first came to office and dissolved the Land Commission and abolished the State Management Scheme in Carlisle. I agree, nevertheless, that the motive is still there.
The Government's attitude is extremely short-sighted. Whatever they may feel about the difference in political philosophy separating the two sides of the House, and whatever they may feel about profitable ventures being kept in private hands and the public sector being starved of all save the bare essentials to keep going, they are, in fact, being rapidly overtaken by events.
I am a member of the Standing Committee which is now considering the Industry Bill. The Minister for Industrial Development has been described in Conservative Party literature as the spearhead of the attack on Britain's regional economic problems. If he is the spearhead, I can only say that the Undersecretary of State for Trade and Industry is very much a blunt instrument.

Mr. Ronald Brown: The feathers on the spear.

Mr. Cocks: The feathers on the spear, as my hon. Friend said. Whatever the Under-Secretary's political philosophy may be in rejecting the substance of the Amendments, his thinking is stereotyped and out of touch with what we are doing in the Standing Committee which is considering the problems of the regions. There is a good deal of agreement between the parties on the solutions required. It is common knowledge that the Government have embraced a great deal of the thinking of the Labour Government and of the Labour Opposition in the last few years. We are trying to fashion tools to cope with the serious regional economic problems which now afflict this country.
If the Minister accepted the Amendments, he would put fresh power into the hands of the public sector to help to bring prosperity to parts of the country at present in serious difficulty. I urge

upon his attention, in particular, the proceeding sat our last sitting in the Standing Committee, when we discussed the difficulty of shifting the centre of gravity and attention in this country away from the South-East of England.
In the discovery of North Sea gas and its exploitation by the Gas Corporation we have a wonderful opportunity to shift the centre of gravity somewhat towards the north, and to limit the corporation in the way the Bill now does is simply to throw that opportunity out of the window.
If, as provided by Amendment No. 6, the corporation is able to sell, and if, as provided in Amendment No. 8, it is able to export, not only shall we put a much more prosperous and secure future into the hands of those who work in the industry but we shall give the Government, through the public corporations, much more power to influence the economy and steer away some of the regional problems.
Because our life span is limited, we are inclined to think that the North Sea gas reserves will go on more or less indefinitely. But they must at some time run out, and if there has been no attempt by the public sector to develop ancillary work from this bonanza, as it has been called, we shall have missed a great opportunity.
In this connection, I direct attention to the Amendment dealing with the export of manufactured gas fittings. It may well be that in other parts of the world, especially in newly developing countries where there is a great shortage of fuel, substantial reserves of natural gas will be found and there will be an enormous market waiting for the supply of the necessary fittings to bring it on stream. That is the sort of chance which the Minister is turning down in his stubborn resistance to the Amendments. He is refusing a flexibility to take these new chances which will be presented to this country.
In an entirely non-party spirit, I urge the hon. Gentleman to give up his stereotyped thinking which has so be devilled last Friday and this and to try to appreciate the possibilities offered by the Amendments, not simply in the short term but in the long term, too, so that, as my hon. Friend the Member for


Newcastle-upon-Tyne, West (Mr. Bob Brown) has so often said, the people who give their working lives to the industry may themselves share in the undoubted economic prosperity which should be brought by this great windfall discovery of gas on our doorstep. Even at this late stage, I ask the Minister to think again, to meet us more than half way, and to accept the Amendments.

2.30 p.m.

Mr. Palmer: It could be said very fairly that the Amendments crystallise accurately the fundamental differences of philosophy between the two sides of the House on their approach to public ownership. My hon. Friends have attended the debate in considerable numbers— —

Mr. Emery: Rubbish.

Mr. Palmer: The Minister can say what he likes, but if he looks behind him he will see that by comparison the Opposition side of the House is relatively crowded. This is a place for making speeches, and when it comes to making speeches the Opposition have scored very well. I was trying to be moderate about this and to express my regrets that since we are discussing fundamental differences of philosophy it is a great pity that the party of private enterprise is not here in greater numbers to defend its cause.
We do not regard public ownership as a regrettable necessity in certain limited public utilities, to be shackled and to be caged like a dangerous animal. We see public ownership possibly as the majority system of ownership in the future in an industrial society, but we are quite prepared to let life decide on that. The Conservative Party might look with some suspicion to the time of the extension and diversification of publicly-owned industry. We gladly welcome enterprise and initiative by the management of publicly-owned industries.
The Under-Secretary said that in their past legislation Labour Governments had followed a policy which restricted nationalised industries, including the gas industry. He said we had not given the publicly-owned industries a clear field to do just what they liked. That is so. This is a constitutionally-governed country and matters must be regulated by Statute. But we do not assume that because certain limitations were imposed

in nationalisation Acts in the late 1940s and even in the 1950s, those limitations necessarily must stand for all time. We have gained a great deal of experience in the working of the public sector. We are sharpening up our ideas and in the Amendments we are going into the attack; we are not adopting a defensive attitude.
Provided that the management of the Gas Corporation is prepared to look at matters according to the profitability and efficiency of its enterprise and provided that it acts commercially, we believe that it should be allowed to decide what are the sectors in which it is desirable to participate. It is now proposed to pay these gentlemen salaries in some cases in excess of £20,000 a year, and in these circumstances they should be reasonably competent to make their own commercial decisions. However, the Bill says that they must go to the Minister before they can even sell fittings in overseas markets.
The Amendments provide that given the check of commercial accountability and commercial viability, if there is a proper market for the fittings or the plant there should be no God-given law that a publicly-owned industry should go so far and no further. The hon. Member for Bedford (Mr. Skeet) seemed to say earlier that it was quite natural for the publicly-owned gas industry to sell natural gas but that it was not natural for the Gas Corporation to sell other products, even on a commercial basis. I do not see the distinction.

Mr. Skeet: I said that the corporation had a perfect right to sell liquid petroleum gas if it was manufacturing it, but not to manufacture it through a secondary stage into chemicals.

Mr. Palmer: But there is no God-given law about that. That is a matter for the House to decide and the hon. Member must not say, as though it were self-evident, that the corporation can go so far but no further. It is the business of the legislation, in the light of experience gained in the operation of publicly-owned industries, to see whether, if necessary, the frontier of public ownership can be extended. Provided that public enterprise proves itself to be efficient and accountable there is no reason why the country should not end up with a majority sector of public ownership and a minority


sector of private ownership. This is all a matter of experience.
In some circumstances the right of the Gas Corporation to sell plant will help to keep down the corporation's costs. It is no use the Under-Secretary saying that if the corporation produces a one-off item, which is a novel piece of apparatus, there shall be no further sale. Within my experience of industry I have known ideas to be developed which were of practical benefit to the enterprise and which also often found a ready sale outside it.
In dealing with the important point raised by my hon. Friend the Member for Chesterfield (Mr. Varley) about the European market if Britain enters the EEC, the Minister did not seem to see any great problem, although he was not particularly clear on the point. I have made not particular study of the organisation of gas utilities in Europe. I know a little about the organisation of electricity utility undertakings. One characteristic of European utilities is that often, if they are not fully publicly-owned as they are in France, manufacturing enterprises hold shares in them. That is very often the Continental pattern. In some cases the idea is taken as far as to bring in a municipal undertaking which will own shares also. In these circumstances obviously there will be very real incentives for these European mixed ownership enterprises, given an open market into this country, to sell gas fittings here. If our own gas industry, entirely confined and limited to the public utility field, is to have a restriction of this sort placed on it, it will be handicapped against its European competitors. The hon. Gentleman does not seem to have given a great deal of thought to this point.
The Clause as drafted enables the Minister to give permission. I would have been happier if the hon. Gentleman had given the House an undertaking—he has told us that he is not prepared to accept the Amendment—that if it is a question of the gas industry in this country holding its own against European competitors Ministerial permission will be readily forthcoming. We are not attempting to argue that in all circumstances the gas industry must sell fittings either at home or abroad. We are prepared to leave that to the judgment of the industry.

I agree with those who have said that the primary task of the Gas Corporation is to sell gas, but we argue that the sale of fittings is ancillary to that basic purpose and that, wherever in the judgment of the commercial management of the industry it is desirable to sell because of the revenue it provides, the industry should be allowed to do so.
My hon. Friend the Member for Chesterfield, in speaking of international sales, on which he had a great deal of information, referred to the International Consultancy Service of the Gas Council. If hon. Members will turn to page 16 of the Annual Report and Accounts of the Gas Council for 1970–71 they will see there four paragraphs devoted to the International Consultancy Service. Paragraph 67 says that the service was established in May, 1970, shortly before the General Election—
… with responsibility for the commercial exploitation of the gas industry's inherent expertise. Subsequently the Department was given responsibility for overseas exploitation of the industry's proprietary rights and the arrangement of training schemes for, and visits by, foreign gas industry personnel".
I will not weary the House with further quotations save only to refer to paragraph 70, which says,
The exploitation of patents overseas centred mainly on the promotion of Gas Council technology in North America for the production of substitute natural gas.
The report goes into other technical matters, and it is obvious to us on this side of the House that the overseas technical connections of the gas industry are developing all the time.
If, in exploiting these overseas contacts, the gas industry finds that it can make profitable sales overseas to advance British export trade, what is wrong with that? It can do this at times in co-operation with private manufacturers if it wishes to do so. I do not entirely agree with the Minister that under the Statutes it would be easy to issue the necessary licences if it is to be done under licence. If it is profitable to the gas industry and to the country to exploit international science by the sale of British gas fittings abroad, why should we allow a matter of doctrine, the conception of a certain fixed boundary between private enterprise and public enterprise, to stand in the way of the prosperity of the country? There is no law of God that makes


that necessary. It may be a law of the hon. Member for Bedford, but he has not yet attained that eminence, thank goodness.
We are putting forward proposals which would be to the commercial advantage of the new Gas Corporation, proposals which emphasise the positive approach of this side of the House to the whole question of public ownership. The arguments advanced by the Minister

Question accordingly negatived.

Amendment made: No. 7, in page 3, line 40, leave out 'subsections (2) and (3)' and insert 'subsection (2)'.—[Mr. Emery.]

Clause 3

DUTIES OF CORPATION TOWARDS EMPLOYEES, AND IN RESPECT OF RESEARCH

Mr. Emery: I beg to move Amendment No. 10, in page 4, line 20, after 'functions', insert:
'and of technological development connected with such matters'
I trust that it will be convenient Mr. Deputy Speaker, to discuss at the same time Amendment No. 11, in line 21, after 'into', insert:
'or technological development connected with'.
and No. 12, in line 22, after 'research', insert 'or development'.

in rejecting our proposals do not, in our judgment, stand up on their merits. Since the Minister is not prepared to accept our ideas, it is our intention to test the opinion of the House and we propose to divide on the Amendment.

Question put, That the Amendment be made: —

The House divided: Ayes 22, Noes 41.

Division No. 256.]
AYES
[2.46 p.m.


Archer, Peter (Rowley Regis)
Kaufman, Gerald
Rankin, John


Bidwell, Sydney
Kerr, Russell
Stewart, Donald (Western Isles)


Brown, Bob (N'c'tle-upon-Tyne, W.)
Lewis, Arthur (W. Ham, N.)
Stoddart, David (Swindon)


Brown, Ronald (Shoreditch &amp; F'bury)
McCartney, Hugh
Varley, Eric G.


Cocks, Michael (Bristol, S.)
Mellish, Rt. Hn. Robert
Wilson, Rt. Hn. Harold (Huyton)


Concannon, J. D.
O'Halloran, Michael



Davis, Terry (Bromsgrove)
Palmer, Arthur
TELLERS FOR THE AYES:


Garrett, W. E.
Pavitt, Laurie
Mr. Tom Pendry and


Ginsburg, David (Dewsbury)
Perry, Ernest G.
Mr. John Golding.




NOES


Batsford, Brian
Howell, David (Guildford)
Reed, Laurance (Bolton, E.)


Bennett, Sir Frederic (Torquay)
Hunt, John
Rossi, Hugh (Hornsey)


Biggs-Davison, John
Iremonger, T. L.
Rost, Peter


Boscawen, Robert
James, David
Skeet, T. H. H.


Dykes, Hugh
Jopling, Michael
Spence, John


Emery, Peter
Knox, David
Stanbrook, Ivor


Eyre, Reginald
McAdden, Sir Stephen
Stewart-Smith, Geoffrey (Belper)


Fenner, Mrs. Peggy
Maude, Angus
Tebbit, Norman


Fox, Marcus
Moate, Roger
Weatherill, Bernard


Goodhart, Philip
Money, Ernle
Wilkinson, John


Goodhew, Victor
Morgan-Giles, Rear-Adm.
Worsley, Marcus


Green, Alan
Page, Graham (Crosby)



Grieve, Percy
Peel, John
TELLERS FOR THE NOES:


Hall, Miss Joan (Keighley)
Prior, Rt. Hn. J. M. L.
Mr. Tim Fortescue and


Havers, Michael
Pym, Rt. Hn. Francis
Mr. John Stradling Thomas.

Mr. Deputy Speaker: That will be convenient.

Mr. Emery: These Amendments give effect to an assurance given by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), when he was in charge of the Bill, in response to Opposition Amendments which were directed to the same end but, were technically defective.
The effect of the Amendments is to require the Gas Corporation to extend its general programmes of research into matters affecting gas supply and other matters affecting its functions to include technological development connected with such matters, and to give it the duty of securing the carrying out, by itself or others, of the programmes thus extended. Thus, the corporation's research programmes will be required to include development projects, as the Gas Council has in practice done by administrative arrangement.
These Amendments give the lie to accusations made previously by hon. Members opposite that the Government are never willing to agree to the extension of any activity which will benefit a nationalised industry purely because we do not believe in the extension of the public sector. I wish to make it absolutely clear that the Government are determined to do everything in their power to carry out the functions given them by law efficiently, profitably and reasonably to the benefit of the nation. Here is an illustration of the Government working to this end.

3.0 p.m.

Mr. Palmer: The hon. Gentleman has said that the Opposition are not prepared to give credit where it is due, but there are times when the Conservative Party and Conservative Ministers are anxious to look after the efficiency and advance the interests of publicly-owned industries I willingly concede that this is the case in regard to these Amendments. We raised in Standing Committee the need not only to give the Gas Corporation power to conduct research but to ally this with development. The Minister has now conceded the strength of our arguments, and we readily acknowledge his enterprise.
Those of us who follow the fortunes of the nationalised industries find that there is a split in the personalities of the right hon. and hon. Members opposite. When they have the responsibility for nationalised industries, very often they enter into the spirit of it. However a Minister's soul tends always to fight the party soul. Before a member of the Conservative Party becomes a Minister he bitterly attacks the principle of public ownership and attempts by words to reduce its achievements. When right hon. and hon. Members opposite come to office, I readily concede that they are obliged to advance the interests of the nationalised industries, and often they do so genuinely. That is as it should be.
I wish to say a word about the principle involved in adding development to research as one of the obligations of the Gas Corporation. Nearly all the research undertaken by an industry of this kind is bound to be applied research. There is little need for the Gas Corporation to

enter into abstract principles of physics and do pure research. That can be left to other Government and private enterprise laboratories and to the universities. Therefore, it is important to emphasise that the research undertaken by the Gas Corporation should be research with a purpose, and the industry does a great deal already, as can be seen from a study of the annual report.
It is particularly appropriate that the Minister should add development to research in the Amendment because the issue is extremely topical. The controversy associated with the Rothschild recommendations has revolved round having research strictly applied to a specific purpose. It would have been contradictory if the Government had held to the view that they maintained in Committee, that the present words which simply had research standing by itself were sufficient and that it was not necessary to add development. That would have been to contradict the Rothschild principle which in other spheres they appeared to uphold.
Our point of view has been accepted. Our request has been granted. It would be ungenerous of me to look a gift horse in the mouth. Nevertheless, looking back to our debates in Committee when the hon. Member for Cirencester and Tewkesbury was still Minister—he came to an untimely political end a little later—the hon. Gentleman spent nearly 15 minutes explaining that our words were not necessary and that the words in the Bill were sufficient by themselves. It was very much a lawyer's argument and, like most arguments of that kind, it failed to convince me. I always go by the plain meaning of words.
We will not go over old battles. But at times it would help if Ministers in Committee conceded points a little earlier. If they did, they would save the time of the Opposition and of the Government. That is not said in any ungenerous spirit. I believe our arguments were sound and, to use a word which is common in this sphere, self-evident.

Amendment agreed to.

Amendments made: No. 11, in page 4, line 21, after 'into', insert:
 'or technological development connected with'.

No. 12, in line 22, after 'research', insert 'or development'.—[Mr. Emery.]

Clause 5

PROGRAMMES FOR MEASURES INVOLVING SUBSTANTIAL CAPITAL OUTLAY.

Mr. Varley: I beg to move Amendment No. 13, in page 5, line 22, at end insert:
(2) In granting approval for such programme as referred to in the foregoing subsection the Secretary of State shall have regard to the effective national co-ordination of all fuel and energy supplies at present available or to be developed in the future.
This Amendment not only is a sensible provision to put in the Bill but will permit the Government to state their views on the development of effective national co-ordination of fuel supplies. We on this side fully realise that nobody can predict with absolute certainty what each sector of our primary energy resources will take up in five or 10 years' time. That exercise has been tried before on many occasions, and we all know the result. However, we believe that it is possible to lay down a general framework of energy co-ordination. That is what we seek to focus attention upon in the Amendment.
It appears to us that the Government are prepared to let the situation drift with no attempt being made to look into the crucial area of energy supplies. On 5th June the Secretary of State for Trade and Industry told the House, in response to a question by the hon. Member for Bedford (Mr. Skeet), that energy questions are kept "under constant review". We want to know what he means by that. No doubt the Under-Secretary will tell us when he comes to reply.
The last time we had a debate on this vital subject was on 10th March when the then Under-Secretary, the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), was bafflingly vague about these matters. He talked about unknown events and uncertainties as though they prevented the formulation of a fuel policy. It is these uncertainties which make it essential to frame a policy.
All informed opinion is agreed that there is a world energy crisis pending, possibly within the next decade. Consumption is eroding known fossil fuels with frightening rapidity. Projections have been made everywhere except

apparently in the Department of Trade and Industry. I do not believe that no projections have been made within the Department, but at the moment the Government are being extremely coy and have not told us what their projections are.
However, if we look elsewhere we can see that projections have been made. Sir David Barran, of Shell, has quoted projections according to his knowledge. Mr. Derek Ezra last week presented his estimates to the National Coal Association in Washington, D.C.—not Washington, County Durham, where the Chairman of the National Coal Board usually makes pronouncements. It passes all belief that the Government do not have their own projections. It is essential for the Government to let us know what the protions are so that all of us can contribute to a formulation of policy. It is no good telling us that it is better to wait until the picture gets clear. That kind of procrastination can only lead to disaster. I do not use that word idly. Every hon. Member who takes an interest in these matters is aware of the factors that must be taken into account to achieve a co-ordination of fuel and energy supplies required by the Amendment.

Mr. Skeet: I do not know whether the hon. Gentleman reads the Financial Times, but he may have seen in this morning's edition the analysis by Mr. M. M. Pennell, a managing director of BP, who has made a forecast of the oil situation in the United Kingdom.

Mr. Varley: I am grateful for that intervention, because it reinforces the point that I have made. We now have the views of the gentleman named by the hon. Gentleman, Sir David Barran. Mr. Ezra and other leading people.
I know that there are many hazards attached to trying to forecast fuel supplies. There are many hazards, for example, in trying to forecast the future of oil. We know how much this country relies on imported oil. It used to be an article of faith of hon. Gentlemen opposite that all that was needed to solve our fuel problems, and, incidentally, to put the troublesome miners in their place, was simply to remove the duty from heavy fuel oil. The Chancellor of the Exchequer has had two opportunities to do something about that, but he is seized


of the importance of maintaining that duty.
We have the wise counsel of Sir David Barran, and the past association of the Secretary of State for Trade and Industry with Sir David ought to make him place a lot of credence on his words. He said:
The days of cheap imported oil are over",
and recent events, even during the past few days, have shown that oil has become not simply a seller's market but a blackmailer's market, even when the availability of supplies can be relied upon, and the oil-producing countries know that they are on to a good thing.
All the major oil-importing countries will soon be joined by an even more voracious new customer, the United States of America. It is estimated that the Americans are running down their reserves so fast that they are down to about nine years' consumption at the present rate, and that by the end of the decade they will be importers of fuel on a large scale. They have an insatiable appetite for oil in the United States and a similar situation exists here.
The situation can be summed up by quoting Mr. Derek Ezra's address to the Americans a week ago. The Financial Times of 21st June reported him as saying:
A new oil find of Alaskan proportions would be needed twice a year by 1980 to maintain the present ratio of oil reserves to consumption, if the existing growth in world demand for energy continued.
I know that hon. Gentlemen opposite will say that in this country the gap can be made up by North Sea oil scheduled to come in in greater quantities by 1975 and build up to even greater supplies by 1980, but again Sir David Barran rather plucks us out of the clouds by warning against "premature euphoria" in thinking about North Sea oil. The total reserves of companies engaged in off-shore North Sea activities of the United Kingdom and those of the companies engaged in off-shore activities in Norway and Denmark represent only 1per cent. of the reserves of the Middle East.
The technical difficulties are immense, as Mr. John Petty said in the Daily Telegraph of 5th June. His view then was:

The oilfields are being found in deep water, and there is such a shortage of suitable rigs that Burmah said it will be the middle of next year before it can obtain one to drill in its latest blocks.
3.15 p.m.
That is one example of the uncertainties involved but there is also the astronomical expense. Again I quote from Sir David Barran, who was addressing an organisation of impeccable credentials—the West Yorkshire region of the Economic League—on Friday, 22nd April, 1972, when he said:
Exploration costs, high as they are, will be dwarfed, however, by the huge expenditures that will be required if fields are found large enough to justify the installation of facilities to bring the oil ashore. Conditions off the Shetlands will call for production platforms standing higher than the Post Office Tower and not far short of the Eiffel Tower.
It so happens that the oilfields so far proved are all out in the middle of the North Sea and may take four to six years to bring into full operation. Building pipelines of 150 miles or so to shore will cost as much per mile as a four-lane motorway on land and may take several summers to install. The total cost of developing a field of economic size—producing, say, 250,000 to 300,000 barrels a day—could be of the order of £250 million to £300 million.
Sir David summed it up even more eloquently when said:
If all goes well it is possible that reserves from the North Sea could support production of two million barrels a day in the mid-1980s. This would be a major contribution to the needs of this country, but only a relatively small proportion of the needs of Western Europe.
But Britain will not have access to all these supplies. These supplies will have to be shared between all the countries in Western Europe which have an interest in North Sea oil. It has been calculated that the ultimate potential of the North Sea may represent no more than two years' growth in Western European oil requirements. So we on this side welcome whatever North Sea oil to which we can get access, but let us keep those supplies in proportion as a total contribution of the natural energy supplies for whose co-ordination the Amendment calls.
Again, in considering the effect of national co-ordination of all fuel supplies the Secretary of State will have to consider nuclear power. When we debated this subject on 10th March, the hon. Member for Cirencester and Tewkesbury admitted that electricity from nuclear power was terribly expensive. He said


that no Magnox stations could produce electricity as cheaply as coal, oil or gas, and he pointed out that the AGR Dungeness B station was four years behind schedule. In the most valuable debate initiated last week by my hon. Friend the Member for Bristol, Central (Mr. Palmer), who will have something to say on this subject either today or another day, the Under-Secretary insisted that a decision between the AGR and the steam generating heavy water reactor and the high temperature reactor must not be rushed.
We all know that the Vinter Committee has reported on these issues to the Government, but as far as I can make out the House will be denied that information—quite unjustifiably, as I believe. I appreciate that there are commercial sections in that report, but I still think that it could be doctored to take out items of crucial commercial importance. I hope that the Under-Secretary will tell us that the Government have reconsidered their attitude.
Perhaps the most disquieting development over the last few weeks in regard to nuclear power has been the report which came out of the United Nations Conference on the Environment at Stockholm, which suggested that nuclear power stations and the waste accumulating from them might present safety hazards of terrifying magnitude. I hope that the Minister can tell us something about that as well.
The very great merit of North Sea gas is that it is a clean fuel. It is pollution free. As Mr. Ivan Fallon has pointed out in the Sunday Telegraph, it is available in politically safe areas. Furthermore the cost differential with oil is narrowing rapidly. So it makes every kind of sense to give all due weight to natural gas in the national co-ordination of fuel and energy supplies.

Mr. Skeet: I have been following the hon. Gentleman's argument very carefully. He has spoken about the cleanliness of natural gas. Would it not be more suitable, therefore, to consider not merely its primary use in general distribution but also its use as a fuel for power stations? A very high percentage is used in Holland for that purpose. Should we not so use it here and should

not the Minister give some sort of lead of this matter?

Mr. Varley: I am grateful to the hon. Gentleman. I am coming to that point. I do not share the hon. Gentleman's enthusiasm for using natural gas in that way. He will probably wish to take up my arguments about that. I do not see it in that way. There is increasing discussion about the use of natural gas to generate electricity in power stations. But while I am ready to assert the importance of the maximum use of natural gas, it would be unwise to disregard its limitations. It has its problems; it has problems in exploration, for example.

Mr. Skeet: The hon. Gentleman wants maximum use of natural gas. But one must have a high load factor. Does not consumption by a power station give the high load factor which is essential for profitability?

Mr. Varley: I accept that, certainly. But there are international examples which show that we must go extremely carefully on this matter. Natural gas has its problems in exploration. We all know, with a good degree of sadness, what happened to the onshore gasfield at Lockton in Yorkshire. While, happily, new fields are being reported, and we welcome that, it is necessary to bear in mind that in some respects, as far as we know, natural gas is of limited duration. I come directly to the point made by the hon. Member for Bedford about using it in power stations.

Mr. Emery: The hon. Gentleman will be talking about North Sea natural gas of limited duration, and not natural gas in a world context.

Mr. Varley: I have not been talking about it in a world context. But there has been a great deal of anxiety about natural gas and supplies of it in a world context. I should like to read a section from a paper given by Mr. C. E. Mills, Member for Economic Planning of the Gas Council, to the Institution of Gas Engineers:
In the summer of 1970, engendered by the growing natural gas shortage in the United States of America, interest began to be shown in the Gas Council's gasification processes by U.S. contractors and utilities. The U.S. gas supply market had been traditionally based almost entirely on natural gases and up until the late 1960s supply had always exceeded


demand. In 1968 serious official doubts first began to be expressed about the future availability of natural gas and by1969 the life of U.S. gas reserves was down to an all-time low of 12 years. The regulatory authorities began to prohibit the sale of new industrial loads and in some cases utilities were even unable to cater for increased domestic demand. The situation has worsened considerably since then, and more-widespread restraints have been imposed.
That is the sort of situation that has happened in the United States. There were reports in the Financial Times only a few weeks ago about anxiety in France concerning the future availability of natural gas. There is no doubt that at present natural gas is a valuable component in the co-ordination of a fuel policy. We need to settle this problem and this anxiety about the short-term availability of natural gas.
Environmentally, natural gas is a superb fuel. It is also a superb domestic fuel. If we were now to rush in willy-nilly with a general application of natural gas to generate electricity in power stations, without considering fuel supplies or taking into account everything that is happening, it would be extreme folly. I want to know much more about the availability of future supplies of natural gas before I want there to be a general application of natural gas to generating electricity.

Mr. Skeet: Would the hon. Gentleman approve, therefore, of the CEGB going direct to suppliers such as Sonatrach of Algeria and Phillips Petroleum Co. of Norway and buying its own gas independently of the Gas Corporation?

Mr. Varley: All these possibilities have to be explored. In view of the situation which has developed in America—as Mr. Mills said in his paper to the Institution of Gas Engineers—and in view of the anxiety in France about the availability of natural gas, it would be ludicrous to have massive conversion programmes or to have power stations burning natural gas.
I do not fully understand the calorific value and whether the gas would be fully used in power stations or whether it would be an extremely expensive use of the gas. We must have much more information before we move into that field.
Needing that information, it is here that I think that coal most sensibly comes in. There have been criticisms, but we

know that there are guaranteed coal reserves for about 100 years at present rates of consumption. Coal supplies are not at the mercy of temperamental sheikhs or throat-cutting price rings. Coal is mined by men who have been involved in only one official dispute in 46 years and its supplies are secure in that sense. People who talked during the coal miners' strike about miners holding the country to ransom did not want to realise that there had been only one official dispute and that coal supplies had been disrupted only once in 46 years. The disruptions of oil supplies in 1956 and again in 1967 have been seen in perspective. Since the dispute in the mining industry, productivity has risen to a record level. It is an indigenous fuel which adds no debt to our balance of payments and provides employment in the region where jobs are most needed.
Two other factors which are essential to a nationally co-ordinated fuel policy as set out in the Amendment are the balance of payment problems and the problems of regional policy. Hon Members on the Government side raised their eyebrows when, during the fuel debate on10th March, we on this side warned of the impending balance of payments trouble. Those troubles are now upon us.
However those troubles are to be solved—we trust that they will be solved soon—increasingly the balance of payments must be taken into account in formulating a fuel policy. As recently as Tuesday, 27th June, the Prime Minister, when talking about import figures at Question Time, said that the largest single item in the import bill was imported fuel for manufacturing industries. Foreign exchange costs are as crucial as the cost per therm, the cost per unit or the cost per ton.
3.30 p.m.
There is also the regional argument. A week ago last Thursday the Prime Minister was euphoric about the fall in unemployment, and we join with him in rejoicing in that good news. But unemployment is still extremely high—the highest in 30 years—particularly in areas where coal is produced, in Scotland, the North, the North West and Wales. We should not forget that three-quarters of our coal is mined in what we describe as the assisted areas—the special development areas, the development areas and


the intermediate areas—and the exploitation of North Sea gas and North Sea oil can have a beneficial impact on the assisted areas. There may well be a time when the old traditional coal areas will benefit from exploitation of the onshore or bringing-ashore development of North Sea gas and oil.
These are some of the considerations that we would like taken into account in framing a co-ordinated fuel policy as the Amendment suggests. Without an adequate fuel supply, life as we know it would be virtually unsupportable in these islands. We do not think these crucial energy questions can be left to the free play of the market. It would be absolutely ludicrous to allow that to happen. We need a comprehensive national fuel policy. We believe that the security of supply demands a much greater emphasis than ever before.
Amendment No. 13 provides a good opportunity for the Under-Secretary to state the Government's thinking on this matter. It need only be interim thinking; we know that the matter is kept constantly under review. If the Government refused to confirm a fuel policy, they would be shuffling off their obligations and it would be an act of abdication and irresponsibility. The Amendment imposes on the Government an obligation to formulate such a policy, and I urge the House to accept it.

Mr. Emery: I respond immediately to the hon. Gentleman's remarks. It would be right and proper if I dealt first with the Amendment which has been used as a coat-hanger for a much more general speech by the hon. Gentleman on fuel policy.
I do not believe that the Amendment would improve the Bill, because the Secretary of State has to bear in mind fuel policy considerations, where relevant, as well as many other things in performing all his functions which are concerned with fuel policy under this Bill and under other Measures relating to energy supply.
Other functions where fuel policy considerations might be particularly relevant are the giving of consents under Clause 2(4); natural gas operations—which could be abroad—or the exporting of gas; or, under Clause 29, the direct supply of by-product gas. It would be undesirable to single out this function—

that is to say, the approval of capital development programmes in the gas industry—to imply that this alone, amongst all the other functions, was the one in which there should be exercised decisions in the light of fuel policy considerations and so as to imply that those other considerations are the only or main ones to which the Secretary of State has to have regard. I hope, therefore, that the Amendment has been put down purely for probing purposes so that I could respond to some of the suggestions which have been made.
I emphasise that energy policy is under continuous review. Energy prospects have to be kept in mind by the Secretary of State when coming to decisions in this context, not with reference only to the gas industry but generally.
The energy policy review referred to in an earlier debate by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) has made good progress. I have to say that it is not yet complete, but the House will realise, I am sure, that the study deals with extremely complex and extensive issues over the whole range of matters involved.
Security of supply vital to our economy and to our domestic life is of major importance. What is more, we must carefully consider not only price factors as such but the variability of price factors, and, beyond the question of security, the availability of supplies and the reserves of hydrocarbon and other energy. All this has to be taken into account as well as—and rightly so—the balance of payments problems involved.

Mr. Skeet: When one takes into account the reserves of British companies, not merely on the Continental Shelf in the North Sea but also the BP half-interest in Kuwait and its 40 per cent. interest in Iran, considering all these as British reserves, do we not have ample?

Mr. Emery: It would be a foolish Minister who said that we had adequate reserves of any source of energy. Even the coalfields are not inexhaustible. The reserves vary in different degree. Moreover, I think that my hon. Friend is too old a hand on the subject of oil and hydrocarbons not to realise that there may be problems in transporting some of the reserves to which he referred, as well


as problems of permanent security of such reserves. We have already seen actions in certain parts of the world which have not necessarily ensured that some companies have been able always to maintain their present ownership.

Mr. Skeet: I am sure that my hon. Friend appreciates the helpful arrangements made by the Shah of Persia.

Mr. Emery: My hon. Friend refers to the arrangements which have been made between the oil companies and the Shah. I think it right to say that these arrangements, so successfully come to, are of considerable significance for all the participants.
I turn now to the social effects and the matters of judgment which have to be balanced in considering the use of North Sea gas and of coal. One has in mind, also, the availability of atomic power and the growth of atomic power stations, to be judged in relation to the requirements of the electricity industry and in the light of the problems which these developments may involve for the electricity industry's coal burn.
What I would hope would go out from this debate is that, while it is easy for us to make demands for consideration and demands for a balanced programme, when it comes to the highly involved considerations the number of variables is very great indeed. I am not trying to hide behind the degree of variability, but it is essential for the Government and the Secretary of State to be quite clear on them in taking policy decisions which are necessary for the benefit of energy industries throughout the country.
There are two or three factors concerning the gas industry— —

Mr. Palmer: The real point here is that one appreciates how difficult it is to co-ordinate energy supplies. But surely there should be no waste of resources. The load factor on all the resources should be as high as possible, and that is the principal motive behind the Amendment.

Mr. Emery: I accept the desirability of having a non-waste factor of resources. While the hon. Member was interjecting I was thinking that the difference between the first generation of nuclear power stations and the fast breeder pos-

sible in years to come is a variation from 1 per cent. in thermal efficiency to about 70 per cent. So there are great differences in the waste factor in the electricity industry. In theory I accept immediately the desire projected by the hon. Member but he will realise, with his experience in the industry, how difficult this is in practice.
On natural gas absorption factors and the conservation of reserves, there are problems in the use and the rundown of North Sea gas. The present absorption policy was based upon analytical work begun in 1967 and has been reviewed much more recently. Because an optimistic view was taken of future prospects these studies favoured rapid depletion to encourage further exploration. They took account also of the risk of possible misuse of gas in markets where the net benefit is low or perhaps non-existent. The outcome was a policy of rapid depletion, together with a marketing policy aimed at expanding sales in markets where gas has a high value—obviously this includes the domestic market—but a more cautious approach was adopted to markets where gas has a comparatively low value such as crude heat.
Existing contracts were agreed on the basis of that policy and will allow an expected take of 4,000 million cubic feet a day to be achieved in the mid-1970s. If there are no further discoveries production will begin to decline from plateau level towards the end of the decade and supplies from other sources—synthetic natural gas or liquid natural gas will be needed. The aim of policy remains the same—to strike a balance between the advantages to the nation of using gas quickly and the disadvantage of not having it available for future use. Whether this will mean continuation of the present absorption policy or a move towards longer depletion periods to conserve resources depends upon how much gas is found and how much gas is contracted for outside the British Continental Shelf.
Hopes for the future are still high. Exploration is proceeding rapidly. It is right for the House to note that the general Government policy of licensing and encouraging many firms to take part in exploration in the North Sea has been immensely successful.
The key to this strategy is the degree of flexibility that we have been able to obtain. The gas industry has largely met its absorption targets because current prices are sufficiently attractive to produce the required sales. It would have been impossible for the industry to achieve anything remotely resembling its present rate of expansion without natural gas. I hope to say more about that when we come—at some time in the future—to the Third Reading. The present rate of expansion has been achieved because prices have been right.
3.45 p.m.
I do not know how many people realise that in money terms the average price per therm paid for gas by the domestic consumer was slightly lower in 1970–71 than in 1966–67. Its price in real terms was, of course, considerably lower in 1966–67, and that will certainly remain true for 1971–72, in spite of the further 5 per cent. increase. With the increasing use of gas by industry and other large users, who can be supplied much more cheaply on a per-therm basis than can smaller users, average prices in these markets have fallen significantly, even in money terms. That is of considerable importance in the overall consideration of the rôle that the gas industry has been able to play in the total energy policy.

Mr. Skeet: My hon. Friend will realise that gas might have been produced more cheaply by the oil companies in the first place.

Mr. Emery: My hon. Friend and I seem to be having a running commentary—a sort of "nip and tuck", or whatever it might be. I do not intend to become involved in the question of the pricing structure of the industry other than to say that I believe that it has been beneficial to the companies, the industry and the consumers. If we can negotiate that sort of deal we are doing fairly well for everybody concerned with gas. The proof of this is the amount of work still being done in the North Sea to find more gas.
I accept the general thesis of the Opposition. It must be the general thesis of any Government that the Department which is in control of fuel and power must have a general concept of an energy policy at all times in order to be able to assess the position and make judgments for the future. The variables are so many

and so great that it is very difficult to publish an absolute assessment of the way in which the policy is working. That problem was experienced by the Socialist Government when they were in office.
I end by repeating that the review is being carried on. My right hon. Friend the Secretary of State has said that he wants, in whatever way is possible, to bring the House into his thinking the moment that the present stage in the review has been formalised.

Mr. John Cronin: I support the Amendment which has been so ably moved by my hon. Friend the Member for Chesterfield (Mr. Varley). I am surprised that the Under-Secretary of State is not prepared to accept it. It produces no substantial change in the Clause but simply asks the Secretary of State to take into consideration effective national co-ordination of fuel policy. Why does the Under-Secretary feel that that cannot be imported into the Bill? Clause 5, which deals with capital reconstruction, is surely the most appropriate place to insert the Amendment. Is it the Government's intention when they consider capital programmes not to take into account effective national co-ordination of fuel policy? If it is their intention to take it into account, why cannot this simple Amendment be accepted? One might feel that there are sinister implications in the Under-Secretary of State's obstinacy.
My prime concern is with the coal industry. Like all my right hon. and hon. Friends, I am concerned that the coal industry should be looked after in the best possible way, but I also have constituency interests as I have the good fortune to represent the South Derbyshire and Leicestershire miners, who work with exceptional efficiency and energy and are the cream of the coal industry. I cannot expect my hon. Friends who represent other mining constituencies to agree with me on that point.
The coal industry has had an unfortunate time in recent years as a result of Government policy. It has certainly been run down too much, and Lord Robens' original warnings on the subject should have received more attention than they did. We are all aware of the effects of the coal strike. If ever there was a totally unnecessary strike, it was the last coal strike. It was an example of absurd


ineptitude on the part of the Government and it is incredible that it should have happened. Nevertheless it has happened and it has had unfortunate consequences.
The National Coal Board this year will have a loss of between £60 million and £65 million, in spite of the £100 million grant given by the Government. All these financial troubles are superimposed upon the accumulated deficit of £100 million. So the National Coal Board is clearly in serious financial difficulties.
Great damage has been done to industrial relations in the coal industry. Miners are very forgiving people and often have short memories for the injuries they have received, but there is still some outstanding bitterness for the hardships to which the miners and their families were subjected by the Government's attempt to reduce their standard of living in order to keep down the general trend of wage settlements. Serious damage has been done to industrial relations in the coal industry.
We must remember—it is no secret—that there is a great deal of restiveness among back benchers on the Government side of the House. There is a feeling that the miners are being treated softly and that the Government should be tougher with them. I hope that the Under-Secretary of State will reassure us that he will not give way to these backbench pressures.

Mr. Skeet: Does the hon. Gentleman want coal production of about 140 million tons, or is he prepared to have production reduced to 110 million tons?

Mr. Cronin: We want no less than 140 million tons, but this must be effectively worked out.

Mr. Skeet: Mr. Skeet rose

Mr. Cronin: The hon. Member for Bedford (Mr. Skeet) has been emulating a jack-in-the-box throughout the debate but we must get on without constant interruptions.
What are the Government's intentions for the coal industry in future? The first thing to know is what kind of financial reconstruction is intended by the Government to cope with the coal

industry's financial difficulties. What will be the Government's policy on coal imports? It is absurd that coal imports should continue on such a substantial scale.
Furthermore, we should also know the Government's policy on the size of the coal industry, which is a very important matter. Are they expecting it to contract or to remain the same? Finally, the most important consideration for the House to know is the Government's policy on the payment of miners' wages. May we have some reassurance that there will be no further attempts to reduce the standard of living of coal miners to assist the Government's unannounced wages policy? These are things about which we have been given no clear indication.
With regard to the competitiveness of coal, my hon. Friend the Member for Chesterfield pointed out in his excellent speech that oil would become less competitive, partly as a result of a reduction in oil resources throughout the world, partly as a result of political difficulties in the Middle East and partly because of the increasing voracity of the Middle East sheikhs on the question of prices. We have also heard about the expensive nature of nuclear power and, indeed, about how unsatisfactory it is compared with coal. Again, there are the uncertainties associated with natural gas supplies.
I am afraid my speech will have to be truncated in view of the very short time that is available. Serious as our reservations are about entering Europe, one thing that seems certain is that if we are to enter the EEC there will be a greatly increased market for coal. It would be pleasant to have from the Under-Secretary a reassurance that the Government do not intend to bring about any contraction of the coal industry and, most important, that they intend to make sure that miners have the best possible conditions of work and wage payments consistent with their importance to the national economy.

Mr. Skeet: I was interested to hear my hon. Friend the Minister say that fuel policy is kept continuously under review. From time to time we should like to see the interim results. I tabled a Parliamentary Question some time ago on this matter. I appreciate that we had some


sort of fuel policy in 1967, but it was based entirely on the wrong grounds. We have now reached 1972, however, and I am certain that my hon. Friend will soon be advancing a fuel policy to cover the entire field.
I am concerned to discover how much gas there is in the Continental Shelf. I have been told that there is about 55 trillion cubic feet in the entire North Sea, and a lot of that would be available to the United Kingdom. This morning's Press tells us that there has been an assessment by BP of reserves and the managing director of BP has said that vast quantities are coming forward. The Middle East has 18·5 times as much oil as has so far been discovered in the North Sea and for North Africa and West Africa the quantity is about three times that figure. Therefore, we have to be relatively cautious. If we are at the beginning of a great opportunity in the North Sea, we should know whether Shell, Esso and the other companies which are making discoveries in the North Sea will be moving to other locations.
We find this morning that yet another company has made a discovery. Hamilton Brothers, in block No. 1324, has found—

It being Four o'clock the debate stood adjourned.

Debate to be resumed upon Monday next.

Orders of the Day — TOWN AND COUNTRY PLANNING (AMENDMENT) BILL [Lords]

Order for consideration, as amended (in the Standing Committee), read.

Hon. Members: Object.

Consideration deferred till Monday next.

Orders of the Day — FIELD MONUMENTS BILL [Lords]

Order for consideration, as amended (in the Standing Committee), read.

Hon. Members: Object.

Consideration deferred till Monday next.

Orders of the Day — HORTICULTURE (WHOLESALE MARKETS)

4.1 p.m.

The Minister of State for Agriculture, Fisheries and Food (Mr. Anthony Stodart): I beg to move,
That the Grants for Wholesale Markets (Extension of Period) Order 1972, a copy of which was laid before this House on 16th June, be approved.
For the convenience of the House, perhaps I might give merely a skeleton of the purpose of the order. If hon. Members wish to raise any questions, I shall be delighted to answer them.
The purpose of the order is to extend by two years the period in which authorities providing major wholesale horticultural markets can qualify for grant by completing an approved scheme of development. The effect of the Order would be that marketing authorities would have until 14th April, 1976, to complete their schemes.
Major redevelopments have been completed at five markets in England, at two in Scotland and at one in Wales. Work is well on its way at Nine Elms and Manchester, and five other markets are hoping to start on their reconstruction before the end of this year. But authorities are acutely aware that under presen legislation only work that is finished by April, 1974, will be eligible for grant, and some of them are far from certain that they will be able to meet that date. The 1964 Act provides for the closing date to be extended to April, 1976—that is, for two years—by order.
I hope that the House will agree that this should now be done in fairness to authorities which have been held up through no fault of their own, and in order to avoid wasting the work which has gone into some projects or seriously undermining the financial calculations on which those projects were based.
With that admittedly short explanation, and repeating my assurance that I shall be happy to answer hon. Members' questions, I commend the order to the House.

4.3 p.m.

Mr. Eric Deakins: We on this side of the House are not opposed to the order. Indeed, we welcome the extension of time which is


being given in accordance with the provisions of the 1964 Act. However, there is a provision in that Act which the Minister of State has not mentioned for an extra £5 million increase in the sum of money to be made available. That is Section 10(6)(b).
Will the Minister tell us, first, how much money has been paid out in the past eight years and, secondly, whether it is his intention to introduce an order, if one has not been brought in already, for the extra £5 million to be made available, bringing the total over 12 years up to the £25 million made possible in the 1964 Act?
This is particularly important because of the position of Covent Garden. It is taking a long time to resite the market. We know that building costs are rising. We also know that the grant for Covent Garden has to come out of the original £20 million laid down in the 1964 Act. If Covent Garden costs have escalated, it is only fair that the extra £5 million should be made available so that other wholesale markets do not suffer by being deprived of funds.
Furthermore, will the Minister tell us something about the present state of the distribution system for horticultural produce? Are the Government satisfied that sufficient improvements have been made and are envisaged to make our industry more competitive to meet the tougher conditions likely to be experienced if we enter the Common Market? Is the Minister satisfied that the markets which have been and are likely to be grant-aided in the next four years are being sufficiently modernised with machinery like telex to enable them to compete effectively with both home and foreign competition?
My final question concerns the position after April, 1976. Obviously, if this sort of system is to go on. new legislation will be necessary. Will the Minister tell us something about the longer-term thinking of the Ministry? Is he satisfied that by April, 1976, with the schemes which are in the pipeline and proposed by local authorities we shall have put our system of the wholesaling of horticultural produce on a reasonably competitive footing which will thereafter need no further grant-aid from the Government?

Mr. Anthony Stodart: I am grateful to the hon. Gentleman for his usual set of pertinent questions on this subject. He was absolutely right in his quotation from Section 10(6) of the 1964 Act. There is provision in that section for an extra £5 million. The order provides only for an extension of the time limit and not of the moneys available. At current prices, past payment and present and foreseeable grant commitments amount to just under £18½ million. It is possible—I should not wish to rule this out—that rising costs may increase this total to something above the £20 million provided by the Act. If so, it will be necessary to introduce an order extending the money limit. At present there is no basis for saying by how much, if at all, the £20 million may have to be raised. I hope the hon. Gentleman will agree that perhaps we should see how things go, and if need be, I shall have to come back to the House and ask for a money increase as well as a time extension.
Good and constructive work is being done on the modernisation system. Although the administration is centred on my Department and on the Scottish Office in Edinburgh, we do not plan to issue dogmatic rules for the construction of markets. This is a matter that is best left to the market authorities and the traders to determine. However, when we look at the spread of markets which have already been completed—we see them as far apart as Leeds, Gateshead, Bristol, Leicester, Glasgow, Liverpool and Edinburgh, with new markets under construction, as the hon. Gentleman has said, at Nine Elms and Wolverhampton and starting shortly at Bradford, Belfast and Birmingham—it is apparent that we have good coverage of market projects, with modernisation, which will be of enormous assistance to the vitally important part of marketing our horticultural produce properly.
A considerable amount of discussion is still going on about Covent Garden. One of the conditions is that the scheme must be viable. Discussions are going on between the tenants and the authority, but all the developments asked for by the tenants have been planned. We are hopeful that agreement will be reached on such matters as rents of the holdings. Taking one year with another, I am fairly confident that the new Nine Elms project


will be thoroughly viable and of great benefit to the industry.
I noticed the hon. Gentleman's slight reservation about the possibility of our entering the Common Market, but let us assume that we do. What I think may be comforting to him is that, in the absence of any differentiation in the treatment accorded to home and imported produce going through the markets, we have no reason to think that the grants which we are discussing under Section 10 of the 1964 Act will be regarded as incompatible with the Treaty of Rome or the common agricultural policy.
Having had a good indication during the last few months of the hon. Gentleman's views on this general subject, I hope that will give him satisfaction and that the House will allow us to have what I think is a useful order.

Question put and agreed to.

Resolved,
That the Grants for Wholesale Markets (Extension of Period) Order 1972, a copy of which was laid before this House on 16th June, be approved.

ADJOURNMENT

Motion made, and Question proposed. That this House do now adjourn.—[Mr. Fox.]

Orders of the Day — STATE VISITS (STREET CLOSURES)

4.12 p.m.

Mr. Austen Albu: After that pleasant exchange and in spite of the emptiness of the Chamber, I shall be very much more controversial.
On Tuesday, 13th June, of this year 61 streets in the centre of London were closed for about an hour and a half in the middle of a working day. They included Whitehall, Victoria Street, Grosvenor Place and a number of other main traffic streets and squares. The occasion of this closing was the State visit of the Grand Duke and Duchess of Luxembourg. Something similar occurred on the occasion of the visit of Queen Juliana and Prince Bernhard of the Netherlands on 11th April and will occur again on the occasion of the State visit, which I understand is to take place in October, of the President of the Federal Republic of Germany.
From my record nobody would accuse me of being an inhospitable little Englander. I welcome visits from Heads of State, and even more from Heads of Governments, when they see us as we are and have personal discussions with all sorts of people—which are no doubt valuable to statesmen. Nor, like one or two of my hon. Friends, am I a Republican. I support our constitutional monarchy, not only for the dignified part which it plays in the constitution but also for the historical reasons by which it provides us with a better basis for the stability of our political system than could be provided by any other means. What I saw on the day in question, however, seems to me completely and utterly out of keeping with the present economic condition of this country and its political situation in the world.
I read in The Times—which quaintly continues to devote half a page to Court news of interest to no one, probably not even to the Court itself, and the doings of a small class of people of interest to nobody but a few snobs—that at Victoria Station there was a guard of honour of the 2nd Battalion Cold-stream Guards, accompanied by a band and corps of drums.
As I was walking down Victoria Street the Royal procession passed. The streets as I passed down them—and, I expect, the others, too—were lined with what I imagine was a fairly large proportion of the units of the British Army still available in this country. The procession was led by a Sovereign's Escort of the Household Cavalry in full regalia and consisted of seven carriages, each equipped with uniformed flunkeys, followed by two motor cars.
The crowds, which it appeared to me were forced to line the streets because they were unable to cross them, viewed the show without enthusiasm but, as it seemed to me, with apathetic acceptance. What is more, the Press takes very little interest in these affairs, although it is true that on this occasion at any rate it published some reports and photographs in the inside pages. But it tells me that there is no interest in them and that perhaps the only reason for publishing them is the pressure which has been brought to bear recently by the Foreign Office that the Press has not taken sufficient notice of these State occasions.
On the occasion in question I had just come from the House where I had been having discussions with friends about the economic condition of the country—rather depressing discussions, as a matter of fact—and I was soon to learn that the balance of trade had fallen. The figures showed a deficit of £43 million, the fourth successive deficit in the year. Moreover, there was evidence that the balance of payments total was rapidly declining and that we were very quickly running into sterling trouble.
We had a debate on these matters yesterday, and few people can doubt that the country is suffering from a deep loss of confidence. There is no sense of direction and there is a growing anxiety about inflation that I have never known before, amounting in some cases to almost a sort of hysteria. Moreover, although I have been active in politics for very many years, not since the 'thirties have I felt the people more socially divided.
In those circumstances, how can we expect the young people who watched that exhibition of operatic flummery, which was no doubt suitable in the era of our nineteenth century Imperial power, to believe that our political leaders have realistically faced up to Britain's true position in the world today? What questions are they likely to ask themselves? First, they might ask about the appalling cost and the waste of resources in closing so many streets. And it is not only a question of the streets that are themselves closed. The effects of their closing spread like a river flood behind a dam, so that vast traffic jams extend outwards over a large part of London. I suppose that all of us have friends who complain bitterly how on these occasions they are unable to get to their appointments. I wonder whether the Under-secretary has ever made any estimate of the cost of carrying out these activities three or four times a year.
Even more important, in my opinion, than the direct physical cost is the psychological effect of encouraging an attitude of nostalgic complacency, of looking backwards to our past instead of forward to the very difficult future we have ahead.
The hon. Gentleman may have read an article by Joe Rogaly, a very percipient

journalist, in the Financial Times on Tuesday in which he described the fears which people have at the present time about the future of the country and the awful vision that some of them have of this country as another Spain or Portugal—shabby, genteel, and dependent for any sense of national dignity on remembrances of past glory and the income from the tourist trade.
As I said at the beginning, I welcome these visits from our foreign visitors but I am sure that our visitors—who are as well informed as, if not better informed than, many in this country of our true economic and political strength—would be equally happy if they were to be received with less pomp and ceremony but with equal warmth.

4.19 p.m.

The Under-Secretary of State for the Home Department (Mr. David Lane): I am glad that the hon. Member for Edmonton (Mr. Albu) has raised this subject because it is right and very opportune at this time of year that the House should consider it. I accept very much the spirit in which the hon. Gentleman has spoken, making clear that he is not raising the subject in any republican sense or with any disrespect to our own Royal Family. It is much better that we should discuss the matter on that basis.
It is a question, surely, of striking a balance between the considerations the hon. Member has mentioned and other considerations to which I do not think he did enough justice, but some of which I hope to touch on in replying to him.
In the few minutes available, I should like to do three things. First, I should like to say something about State visits in general. It was to this that the hon. Member mainly directed his remarks. Secondly, I should like to remind the hon. Member and the House of the normal arrangements that are made for State visits to London. Thirdly, I should like to say something about the particular occasion that gave rise to this debate, which was the visit of the Grand Duke and Grand Duchess of Luxembourg on 13th June.
I come first to State visits generally. In spite of what the hon. Member said, I still believe that, with their colour and pageantry, these States drives not only fulfil an international purpose which is


still important but also give pleasure to a great many people. They have always been part of our national life. Another point which the hon. Member might have mentioned and which seems still important is that the ceremonial connected with these visits is a gesture of respect which we ought to pay to a distinguished visitor when we invite him to this country.
As the hon. Member knows, the proper ceremonies for welcoming the Head of a friendly State on his arrival in Britain on an official visit are governed by international protocol, and I believe it is the custom in nearly every country that a visit of this kind should begin with a State drive through the streets of the capital. Here I stress the reciprocity aspect which I think the hon. Member overlooked. It is a question not merely of what we may do in this country on occasions of this kind but of the corresponding courtesies and respect which are accorded to Her Majesty's the Queen and other members of our Royal Family when they travel abroad. Certainly our intention is that the visitor, when he comes, should see something of the capital, and that in turn the citizens of the capital should have the chance of seeing and welcoming their guest.
Despite what the hon. Member said, I believe that these drives are appreciated by many Londoners and by people from the provinces and from overseas. My impression on 13th June was slightly different from that gained by the hon. Member. As it happened, I was in Whitehall at the time. I felt much more warmth than the hon. Member seems to have felt in Victoria Street. Perhaps that is a matter for argument.
At any rate, we have always taken pride in this kind of occasion in Britain, and it would be a pity if the traditional drives through London for visiting Heads of State, which are in any case comparatively rare—I shall revert to that in a moment—were entirely discontinued. I remind the House that these State visits to London and ceremonial drives in London now take place only when it is the distinguished visitor's first visit to this country; otherwise, the more normal venue now is Windsor. It was at Windsor, as the hon. Member mentioned, that Her Majesty Queen Juliana of the Netherlands was welcomed in April.
The hon. Member mentioned the possible irrelevance of ceremonial of this kind to the present situation today, and the perhaps critical feelings of young people on occasions of this kind. Again I remind him that we are discussing a matter of two hours or so in a visit which normally lasts for three or four days. As the hon. Member will know, on later occasions during a visit—I think that the visit earlier this month was typical of the normal pattern of events for such visits—our guests not only make this initial ceremonial drive through London but carry out a very full programme of visits elsewhere outside London, to industrial plants, schools and so on. Our visitors see as much of the life of this country as can be arranged during the few days they are here; not as it may have been nostalgically in the past, but as it is in 1972. That is the other side of the picture which I suggest that the House should keep in mind, as well as the particular events that happened in London during the first one or two hours of the visit. So much for the general question of visits.
I now remind the House of what usually happens in London when visits take place. I am not trying to minimise the inconvenience to the public, which the hon. Member illustrated—and of which I am very well aware—by describing the number of streets which were closed.
It may be helpful if I summarise what is usually done and why it has to be done. Normally, State visitors arrive in London during the morning, whenever possible on a Tuesday. The State drive then takes place outside the rush hours and lasts for only about 20 minutes. So the dislocation of traffic is kept to the absolute minimum. Usually, the visitor arrives by air at Gatwick Airport and travels by train to Victoria Station, where he is met and welcomed by Her Majesty the Queen. The Royal Party then enters the State carriages which, with their escorts, go by way of Victoria Street, Parliament Square, Whitehall, Trafalgar Square and The Mall to Buckingham Palace.
This is the traditional route, and I believe that it is still an appropriate one, because it takes our visitors past two of our most important historical buildings—Westminster Abbey and the Houses of Parliament—shows them Whitehall, which


is the centre of Government administration, and then takes them via Trafalgar Square up The Mall to Buckingham Palace. I believe, again in spite of what the hon. Gentleman said, that the drive is recognised to be one of the highlights of the total programme for these visits and it gives the visitor an important first impression of this country, which we hope is a favourable one.
The arrangements are the responsibility of the Commissioner of Police of the Metropolis. They require the closure of streets, or parts of streets, and traffic diversions while the drive is in progress and for a short period before and after it. The regulations the Commissioner makes are made under powers conferred on him by the Metropolitan Police Act, 1839. He attempts to limit the number and duration of street closures to the minimum necessary to ensure the success of the drive, having proper regard to security and the safety of everyone using the roads.
In making these arrangements, the Commissioner has to close the main streets on the processional route and in the neighbourhood of Buckingham Palace and the point of first arrival, which is usually Victoria Station, together with some other streets which may be needed for assembling the troops who take part in the procession or who line the route.
In consequence of that, it is also necessary to restrict traffic in streets, or parts of streets, leading to the procesional route and to divert traffic which would normally use the closed or restricted streets. In order to do all this, the usual practice is to introduce temporary one-way systems, and waiting has to be restricted as far as may be necessary so that the streets concerned can absorb the traffic that is diverted. The consequence naturally is that a large number of streets—it is certainly a large number when one is counting them up and looking at the list—is temporarily closed or restricted, but often as regards only a short part of their length.
I turn, finally, to the events of 13th June, because I believe that the House will want some account of what happened on the occasion of the visit of the Grand Duke and Grand Duchess of Luxembourg. As my hon. and learned Friend

said in his reply to the hon. Gentleman's Question on 21st June, a number of streets or parts of streets, a list of which was given in the Official Report, had to be closed to traffic, some from 11.35 a.m. and others from just before 12 noon.
The procession started from Victoria Station at 12.40 p.m. After it had passed the streets were re-opened as quickly as possible. Victoria Street and Grosvenor Place were reopened to traffic at 1.3 p.m., Whitehall and adjacent streets at 1.6 p.m., The Mall at 1.30 p.m., and every street concerned was open for use again by 1.38 p.m. In addition to these street closures, the police initiate done-way systems in a number of streets to assist the movement of traffic.
There was inevitably some congestion in the areas surrounding the route. I understand that the worst delays, not unexpectedly, were at each end of Whitehall and near Westminster Bridge and Pall Mall. However, the Commissioner tells me that the traffic was kept moving throughout the whole operation and that things quickly returned to normal once the streets re-opened. I understand, too, that the Commissioner received very few complaints from members of the public.
I have gone into this matter in some detail because, although the hon. Member did not make much of this—he was talking about rather broader aspects of State visits—it is important to use this opportunity to put on record exactly why the police have to make the arrangements they do and the length of time in which abnormal arrangements for traffic movement and the movement of pedestrians have to be enforced.
Returning to the main burden of what the hon. Gentleman said, I do not believe that this is an occasion of nostalgia, though some of the trimmings may give some people that impression. I regard it more as part of the continuing pattern of our international relations—the visits that our Sovereign makes to other countries and the corresponding visits here. It is a matter not only of what the public see, and the ceremonial side of this, which was the point raised by the hon. Member, but of the opportunity which these occasions give for meetings and discussions between diplomats and other people concerned, and, not least important—what I tried to stress earlier on—the programme which is much less


publicised but which is just as, if not more than, important; namely, the opportunity for our visitors to get away from London and, according to programmes drawn up to suit their own preferences, see as much as they can in the time available of the everyday life of the country outside London in all its aspects.
In spite of the criticisms, I believe that the value to the country of occasional State visits—and I stress how occasional they are—the value in terms of diplomacy, the pleasure they give and the spread of international understanding, outweigh the disadvantages—for example, the disadvantages, which I acknowledge, in the shape of temporary traffic dislocation in the capital.
I wish to conclude by stressing that the police have always done their best, and will continue to do so, to keep down to the minimum the inconvenience to the people of London—pedestrians, road users and others—and to keep a balance between the interests concerned on occasions such as these.
This is also an opportunity to pay tribute to the police as part of the summer scene in London. I do not think that any of us going about our business in this House and going about the central

parts of London can fail to be aware of the increase year by year in the number of visitors to the capital from all parts of Britain and from all over the world. Day after day during this time the Metropolitan police do a superb job, by their friendliness, their help to individuals and their efforts to keep the life of London flowing and its traffic moving.
Whatever may be hon. Members' views about the other considerations that the hon. Member mentioned, we should at least acknowledge how well the police take in their stride a number of summer events in London, not merely State visits, and they do all this with the greatest efficiency.
I thank the hon. Member for raising this matter. I hope that on some other occasion we can debate some of its wider aspects. But I assure the hon. Gentleman on the rather narrower point of inconvenience and the closing of London streets that the Commissioner of Police and his staff will bear in mind carefully all that has been said today when they make arrangements for future visits of this kind.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes to Five o'clock.